If the world price is higher than the no-trade domestic price, then domestic producers gain, and domestic consumers lose as a result of free trade.
Answer the following statement true (T) or false (F)
True
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To achieve long-run equilibrium in an economy with a recessionary gap, without the use of stabilization policy, the inflation rate must:
A. not change. B. increase. C. decrease. D. either increase or decrease depending on the relative shifts of AD and AS.
The amount of income that households keep after paying taxes is
A) personal income. B) personal disposable income. C) value added income. D) national income.
Regarding the stock market crash of 1929, evidence shows that
(a) no one expected trouble in the stock market before the October 1929 crash. (b) there was doubt about the speculative heights of stock prices as they continued to rise and more money continued to pour into the market. (c) only active support by the New York Federal Reserve Bank during the summer and fall of 1929 enabled the bull market to last until October. (d) investment trusts and nonbanking money sources correctly anticipated the downturn.
The ideal pollution tax adds how much to private cost?
a. as much as possible b. an amount that will maximize government tax revenue c. an amount equal to the market price d. an amount equal to the external cost e. nothing