Assume that taxes depend on income and the MPC is 0.6 and t is 0.3. An increase in taxes of $10 billion will decrease equilibrium income by
A. $10.3 billion.
B. $17.2 billion.
C. $20.0 billion.
D. $22.4 billion.
Answer: A
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b. The greater would be the optimal pollution tax. c. The further the private market solution ignoring those costs would deviate from the socially efficient level of output. d. All of the above are true.
Which one of the following statements best describes a price ceiling?
a. A price ceiling causes demand to change. b. A price ceiling causes supply to change. c. A price ceiling keeps a price from rising above a certain level. d. A price ceiling keeps a price from falling below a certain level.
When the exchange rate for the British pound changes from $1.80 per pound to $1.60 per pound, then, holding everything else constant, the pound has ________ and ________ expensive
A) appreciated; British cars sold in the United States become more B) appreciated; British cars sold in the United States become less C) depreciated; American wheat sold in Britain becomes more D) depreciated; American wheat sold in Britain becomes less
Refer to Figure 9.6. As a result of this policy, quantity will
A) fall to 300. B) rise to 400. C) stay at 400. D) fall to 400. E) rise to 600.