Fiscal policymakers may actually welcome some inflation for all of the following reasons except:
A. it weakens the independence of the central bank.
B. interest payments tend to be fixed so the real interest payments are reduced.
C. it reduces the real value of the national debt allowing governments to "default" on a portion of their debt.
D. it potentially raises tax revenues.
Answer: A
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The economic incentive for third-degree price discrimination is based upon ________.
A. differences among sellers' costs B. a desire to evade antitrust legislation C. prejudices of business managers D. differences among buyers' elasticities of demand
Psychologists have found that people tend to be ________ in their own judgments
A) underconfident B) overconfident C) indecisive D) insecure
The management of a rental building faces a rent control situation, where it cannot charge more than $400 a month in rent on the apartment. The management knows that the apartments are high in demand and renters would be willing to be $1000 per month for them. The management will
a. Do nothing-it cannot violate the regulation b. Offer a bundle of both the apartment and furniture together for $1000 c. Offer the controlled rent but force the tenants to rent furniture from the management d. Both B&C
When a tax is placed on sellers, the actual incidence:
A. falls solely on the seller. B. falls solely on the buyer. C. may be shared between the seller and buyer. D. is higher because it is being placed on the seller.