Multiple choice question Q.1.14 If the inflation rate is 6% and Susan receives a 6% increase in income, then, overthe year, Susan's:(1)Real and nominal income both remain unchanged;(2)Real and nominal income both rise;(3)Real income rises but nominal income remains unchanged;(4)Nominal income rises but real income remains unchanged.Q.1.15 Value Added Tax (VAT) is a:(1)Progressive, direct tax;(2)Progressive, indirect tax;(3)Proportional direct tax;(4)Regressive indirect tax.Q.1.16 Japan has a comparative advantage over Germany in the production of cars if it:(1)Is able to produce cars at a faster rate than Germany;(2)Produces cars at a lower opportunity cost than Germany;(3)Has the absolute advantage in car production;(4)Exports more cars than Germany. Q.1.20 Although government intervention in an economy is sometimes justified,governments may still fail when they intervene. Government failure occursbecause:(1)Politicians often make decisions that win votes in the short termrather than making decisions that maximise long term economicprosperity;(2)Government organisations are largely bureaucratic and, as such arenot subject to competition or under pressure to maximise profits;(3)Both statements (1) and (2) are correct;(4)Neither statement a nor b is correct.

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Q.1.14 If the inflation rate is 6% and Susan receives a 6% increase in income, then, over the year, Susan's: (1) Real and nominal income both remain unchanged; (2) Real and nominal income both rise; (3) Real income rises but nominal income remains unchanged; (4) Nominal income rises but real income remains unchanged.

Q.1.14 If the inflation rate is 6% and Susan receives a 6% increase in income, then, over the year, Susan's: (1) Real and nominal income both remain unchanged; (2) Real and nominal income both rise; (3) Real income rises but nominal income remains unchanged; (4) Nominal income rises but real income remains unchanged.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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