John’s Bait Shop was surprised to learn that when it raised prices by 10 percent, total revenue was unaffected. This is because the elasticity for bait is
A. unit elastic.
B. inelastic.
C. elastic.
D. Not enough information is given.
Answer: A
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When does the burden of a tax imposed on a good fall more heavily on sellers?
What will be an ideal response?
Transfer payments are not included in GDP because
A) their market value cannot be accurately determined. B) they do not generate additional income. C) they are not purchases of goods or services. D) their value is included in government expenditure.
Which of the following is an example of a fiscal policy?
a. Raising the discount rate b. Reducing the reserve requirement c. Reducing tax rate d. Pegging the currency
Suppose that you borrow $10,000 for one year, and at the end of the year, you must repay $10,450. Also, during that year inflation was 2.5%. The real interest rate is
A) 12.0 percent. B) 7.0 percent. C) 4.5 percent. D) 2.0 percent.