Consumers may benefit more than sellers from a subsidy to sellers if:
A. Consumers can never benefit more than sellers from a subsidy to sellers.
B. the demand curve is relatively less elastic than the supply curve.
C. they deserve the subsidy more.
D. the demand curve is relatively more elastic than the supply curve.
Answer: D
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Assuming that the government can act immediately before the multiplier takes effect, then to offset an increase in investment by $1 billion, government purchases must be:
A. decreased by $2 billion. B. increased by $1 billion. C. decreased by $1 billion. D. decreased by $0.5 billion.
The quantity equation relates a measure of the money supply (M), to the velocity of money (V), the GDP deflator (P) and real GDP (Y). Which of the following expression accurately describes the quantity equation?
What will be an ideal response?
Investment from abroad
a. is a way for poor countries to learn the state-of-the-art technologies developed and used in richer countries. b. is viewed by economists as a way to increase growth. c. often requires removing restrictions that governments have imposed on foreign ownership of domestic capital. d. All of the above are correct.
One similarity between the beliefs of the classical economists and Keynes is that increased saving would necessarily stimulate an equal amount of increased investment spending
Indicate whether the statement is true or false