1) Jacob is deciding how much of his paycheck to save. On what does his incentive to save depend?

A)the marginal tax rate only

B) the federal tax rate only

C) both the interest rate and the marginal tax rate on the next dollar of income

D) both the interest rate and the federal tax rate on the next dollar of income

2) The rightward shift of the AS curve produces __________.

A)a fall in real output and income

B)a rise in real output and income

C)negative economic growth

D) short-term economic growth

3) Another term foroutsourcingis __________.

A)offshoring

B) outshoring

C) migrating

D) decentralizing

4) Economists in the classical and monetarist tradition typically like to __________.

A)let macroeconomic problems work themselves out

B) act in the face of economic crises

C) encourage fiscal policy solutions

D) address local and state problems before tackling federal ones

5) One of the hypotheses of the simple Keynesian model states that _________

A) market forces correct any problem

B) only long-run policy is possible

C) unemployment and inflation cannot exist at the same time

D) government decisions lead to instability