If land suitable for growing corn is also suitable for growing soybeans, and soybeans were found to prevent cancer,
A) the demand for corn would decrease.
B) there would be no effect on the cost of growing corn.
C) the supply (curve) of soybeans would increase.
D) the cost of growing corn would rise.
E) the cost of growing corn would fall.
D
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Starting from long-run equilibrium, a large tax cut will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. expansionary; higher; higher B. expansionary; higher; potential C. recessionary; higher; potential D. recessionary; lower; lower
The Federal Reserve's credit policy refers to
A) the Fed's direct lending to homeowners and students. B) regulations on terms on credit cards that banks issue. C) a direct credit on bank depositors' saving and checking accounts. D) the Fed's direct lending to financial and nonfinancial firms.
It is profitable to hire more labor if the price level ________ and the money wage rate ________
A) rises; falls B) rises; rises by the same percentage C) falls; does not change D) falls; rises E) does not change; rises
Which of the following statements is NOT true regarding subsidies?
A. Subsidies are like taxes in that they create deadweight loss. B. Subsidies are like taxes in that they reduce sales of the subsidized good. C. Subsidies are unlike taxes in that they increase sales of the subsidized good. D. Subsidies are unlike taxes in that they reduce the price that buyers pay for a good.