U.S. residents come to believe that the dollar will depreciate in the future, that is, the exchange rate in the future will be lower than the current exchange rate. As a result
A) the demand curve for dollars shifts rightward.
B) the demand curve for dollars shifts leftward.
C) there is a movement upward along the demand curve for dollars.
D) None of the above answers are correct.
B
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Starting from long-run equilibrium, a large tax increase will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. recessionary; lower; potential B. expansionary; lower; potential C. expansionary; higher; potential D. recessionary; lower; lower
Governments can use subsidies ________
A) as a means of increasing government spending B) when they want to increase taxes C) to achieve an efficient outcome if there are external costs D) to achieve an efficient outcome if there are external benefits
Exhibit 3-3 Demand curves
Assume that consumers expect the price of gasoline to rise sharply in the future. Which of the graphs in Exhibit 3-3 depicts this effect?
A. Graph A. B. Graph B. C. Graph C. D. Graph D.
In which of the following industry structures is the entry of new firms the most difficult?
A. Pure monopoly. B. Oligopoly. C. Monopolistic competition. D. Pure competition.