Following adjustments to a new equilibrium in a market, the market clearing price remains unchanged, but the equilibrium quantity is now lower. Which of the following could definitely have caused this outcome?
A) Demand and supply both increased.
B) Demand and supply both decreased.
C) Demand increased, and supply decreased.
D) Demand decreased, and supply increased.
Answer: B
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Exempting food purchases from sales tax is consistent with the ability-to-pay principle, although not necessarily consistent with vertical equity
Indicate whether the statement is true or false
When the domestic price of a good is below the world price, the imposition of a tariff on the import of the good _____
a. results in a loss in producer surplus b. results in a gain in producer surplus c. does not affect government revenue d. does not lead to a deadweight loss
A "dirty float" is a system
A. Of free-floating exchange rates. B. Of managed exchange rates. C. Based on the gold standard. D. Of fixed exchange rates.
"Laying the groundwork" before introducing a proposal means:
A. beginning to build facility before the ratification of the proposal so that the company cannot back away. B. looking for alternative proposals that can be implemented. C. calculating monitoring costs before implementation. D. being able to market the proposal to those employees who will be affected by it.