Suppose the economy is producing at the natural rate of output. An open market sale of bonds by the Fed will cause ________ in real GDP in the short run and ________ in inflation in the short run, everything else held constant
A) an increase; an increase
B) a decrease; a decrease
C) no change; an increase
D) no change; a decrease
B
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Suppose a $1 tax is placed on a good. The more elastic the supply of the good, the
A) larger the increase in the after-tax price. B) smaller the decrease in the quantity sold. C) less of the tax will be paid by the buyers. D) more of the tax will be paid by the sellers.
If the export supply curve of tomatoes and the import demand curve of tomatoes of Luxembourg intersect at the international price level of tomatoes, then Luxembourg will suspend trading tomatoes in the international market
a. True b. False Indicate whether the statement is true or false
If the social value of producing a good is always higher than the private value of producing it, then there is a
a. negative externality associated with the production of the good, and the market equilibrium quantity of the good is less than the socially optimal quantity. b. negative externality associated with the production of the good, and the socially optimal quantity of the good is less than the market equilibrium quantity. c. positive externality associated with the production of the good, and the market equilibrium quantity of the good is less than the socially optimal quantity. d. positive externality associated with the production of the good, and the socially optimal quantity of the good is less than the market equilibrium quantity.
A natural monopoly exists when:
A. unit costs are minimized by having one firm produce an industry's entire output. B. several formerly competing producers merge to become the only firm in an industry. C. short-run average total cost curves are tangent to long-run average total cost curves. D. minimum efficient scale is attained at a small level of output.