If government's goal is to raise tax revenue and limit efficiency loss, taxation is most effective when:
A. supply is inelastic and demand is elastic.
B. demand or supply is elastic.
C. demand or supply is inelastic.
D. demand is inelastic and supply is elastic.
Answer: C
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Refer to the scenario above. What is the future value of John's deposit after one year?
A) $2,120 B) $2,180 C) $2,320 D) $2,460
Which of the following best represents economic growth?
A) an increase in nominal GDP B) an increase in real GDP C) an increase in the per capita nominal GDP D) an increase in the per capita real GDP
The Fed relies on three instruments to control the money supply. They are
a. taxes, reserve requirements, and the discount rate b. government spending, the discount rate, and open market operations c. reserve requirements, the discount rate, and currency liability d. reserve requirements, the discount rate, and open market operations e. reserve requirements, taxes, and open market operations
An externality
a. results in an equilibrium that does not maximize the total benefits to society. b. causes demand to exceed supply. c. strengthens the role of the "invisible hand" in the marketplace. d. affects buyers but not sellers.