In 1984, the South Carolina State Supreme Court ruled that a 20 percent admission tax on X-rated movies was unconstitutional. When the affected cinemas sought a refund of collected taxes, they were denied on the grounds that the tax, although collected by the theater, was indeed paid by the theatergoers. The Supreme Court apparently believed
a. the supply of X-rated movies was perfectly elastic.
b. the demand for X-rated movies was perfectly inelastic.
c. the legislation intended that the theatergoers pay the tax.
d. the burden fell on the theatergoers-there are no excess burdens on the theater.
b
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A newspaper headline reads: "Fed Cuts Federal Funds Rate for Fifth Time This Year." This headline indicates that the Federal Reserve is most likely trying to ________.
A. ease monetary policy B. tighten monetary policy C. raise interest rates D. reduce inflation in the economy
When there is a reserve requirement, banks
a. must hold exactly the required quantity of reserves. b. may hold more than, but not less than, the required quantity of reserves. c. may hold less than, but not more than, the required quantity of reserves. d. must seek the Fed's permission whenever they wish to expand or contract their loans to customers.
Someone in Germany has just ordered a U.S. car to be exported to Germany. In the U.S. balance of payments, this purchase is a(n)
A) accounting identity. B) special draw. C) surplus item. D) deficit item.
Fixed weight indexes
A. account for responses to supply shifts. B. generally become less accurate the closer in time they are to the base year. C. generally become less accurate the farther in time they are from the base year. D. account for response to demand shifts.