A subsidy is similar to a reverse tax—instead of taking money away from buyers (or sellers), the government gives money back to buyers (or sellers).
a. true
b. false
Answer: a. true
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If Ford Motor Company and General Motors Corporation were to merge, this would represent
A. a horizontal merger.
B. a cartel.
C. a vertical merger.
D. an up-and-down merger.
Expansionary fiscal policy falls short of its goal. Some economists claim it is due to indirect crowding out. What evidence would be consistent with this claim?
A) The interest rate increased. B) The price level decreased. C) Saving decreased. D) An increase in consumer spending occurred.
Refer to Scenario 2. Diminishing marginal returns starts to occur between units:
A) 2 and 3. B) 3 and 4. C) 4 and 5. D) 5 and 6.
When a market is in equilibrium,
a. producers earn profits b. the minimum possible price is achieved c. there is no incentive for consumers or producers to change their current behavior d. excess demand is less than excess supply e. the maximum possible price is achieved