Bans and quotas ___________ in situations where it is difficult or costly for authorities to monitor and punish rule-breakers.
A. often succeed
B. sometimes succeed
C. rarely succeed
D. always succeed
C. rarely succeed
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A firm's marginal revenue is defined as:
a. the ratio of total revenue to total quantity produced. b. the additional output produced by lowering price. c. the additional revenue received due to technical innovation. d. the additional revenue received when selling one more unit of output.
Assume Kevin's income to spend on the two goods in the graph shown is $48, and books cost $12. If Kevin's budget constraint is one of the lines in the graph, which one must it be?
A. A
B. B
C. C
D. It could be either A or B
The government wishes to close an inflationary gap by reducing real GDP by $400 billion. Assuming a tax multiplier of 4 and an income multiplier of 5, which of the following policy prescriptions would reduce the inflationary gap by $400 billion?
a. Decreasing government spending by $400 billion and increasing taxes by $400 billion. b. Decreasing government spending by $160 billion and decreasing taxes by $100 billion. c. Decreasing government spending by $40 billion and decreasing taxes by $40 billion. d. Decreasing government spending by $80 billion and keeping taxes the same. e. Doing absolutely nothing to the economy.
In general, which of the following is NOT a characteristic of a fixed exchange rate regime as defined by the text?
a. Capital is mobile. b. Exchange rates are determined by the market in the short run. c. Arbitrage is free to operate. d. Government takes an active role in foreign currency market intervention.