Which of the following is TRUE about the effects of an excise tax if consumers are totally unresponsive to price changes?
A. Producers pay all of the excise tax.
B. Consumers pay all of the excise tax.
C. Neither consumers nor producers pay the excise tax.
D. Consumers and producers share the excise tax equally.
Answer: B
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In a certain economy, the components of aggregate spending are given by: C = 500 + 0.8(Y - T) - 300rI = 200 - 400rG = 200NX = 10T = 150Given the information about the economy above, the immediate impact on aggregate expenditures of a one-percentage-point increase in the real interest rate (r) from 5 percent to 6 percent is ________, and the eventual impact on short-run equilibrium output is ________.
A. an increase by 700 units; a decrease by 3,500 units. B. a decrease by 35 units, a decrease by 35 units. C. a decrease by 7 units, a decrease by 35 units. D. an increase by 35 units; a decrease by 175 units.
In the above figure, point E represents the level of real GDP at which planned saving equals planned investment. At point C
A) changes in inventories cannot be determined. B) unused industrial capacity exists in the economy. C) unplanned inventories increase. D) unplanned inventories decrease.
The result of a prisoner's dilemma is _____
a. individuals pursuing their own interests are acting for the group interest b. individuals pursuing the group interest are acting against their own interests c. individuals pursuing their own interests are acting against the group interest d. individuals pursuing the group interest are acting for their own interest
If money raised in the issue of new stocks and bonds is used effectively,
a. the income from them is not subject to double taxation. b. a firm need not meet SEC requirements. c. the stock is being "watered." d. they generate the means of repayment.