Which of the following statements is correct?
a. A decrease in the size of a tax always decreases the tax revenue raised by that tax.
b. A decrease in the size of a tax always decreases the deadweight loss of that tax.
c. Tax revenue decreases when there is a small decrease in the tax rate and the economy is on the downward-sloping part of the Laffer curve.
d. An increase in the size of a tax leads to an increase in the deadweight loss of the tax only if the economy is on the upward-sloping part of the Laffer curve.
b
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When the price of perfume changes from $24 to $26, the quantity supplied increases from 100 jars to 150 jars. What is the elasticity of supply of perfume?
A) 0.04 B) 25.0 C) 5.0 D) 0.2
Despite the monetary expansion of the 1992–2000 period, the inflation rate
A. rose due to adverse supply shocks. B. rose due to large increases in aggregate demand. C. fell despite adverse supply shocks. D. fell due to favorable supply shocks.
If the government imposes a binding price floor in a market, then the consumer surplus in that market will decrease
a. True b. False Indicate whether the statement is true or false
A relatively mild period of falling incomes and rising unemployment is called a(n)
a. depression. b. recession. c. expansion. d. business cycle.