The Volumetric Ethanol Excise Tax Credit (VEETC) is a tax credit (which acts like a subsidy) for registered ethanol-gasoline blenders. Qualified blenders receive $0.51 for each gallon of pure ethanol they blend into gasoline
What statement is TRUE? A) With a subsidy, the price paid by consumers will be lower than without a subsidy.
B) Without a subsidy, the quantity produced by blenders will be greater than the quantity demanded.
C) With a subsidy, the equilibrium quantity produced will be lower than without a subsidy.
D) With a subsidy, production will be efficient.
A
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The velocity of circulation of money is the ratio of the real gross domestic product to the money supply
a. True b. False Indicate whether the statement is true or false
Which of the following would cause the demand curve for yen to shift as indicated in Figure 17-5 above?
a. A decrease in the U.S. price level. b. An increase in the U.S. interest rate. c. An increase in Japanese real GDP. d. An increase in U.S. real GDP. e. A decrease in U.S. real GDP.
The main reason that the deficit grows in a recession is that
a. the government reacts quickly and adjusts taxes to compensate. b. monetary policy that targets interest rates causes the costs of borrowing to fall. c. the deficit causes the recession, and reducing the deficit cures the recession. d. many forms of taxes act as automatic stabilizers.
If the price of a good ____________, the demand for its complements will __________
A) rises; fall B) falls; rise C) falls; fall D) rises; rise E) a and b