Net taxes are indirect business taxes plus transfer payments
a. True
b. False
Indicate whether the statement is true or false
False
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If the elasticity of supply of TV sets is equal to 3, then a 10 percent increase in the price of a TV will
A) increase the quantity supplied by 3.33 percent. B) increase the quantity supplied by 30.0 percent. C) increase the quantity supplied by 0.33 percent. D) decrease the quantity supplied by 30.0 percent.
Using Taylor's rule, when the equilibrium real federal funds rate is 2 percent, there is no output gap, the actual inflation rate is zero, and the target inflation rate is 2 percent, the nominal federal funds rate should be
A) 0 percent. B) 1 percent. C) 2 percent. D) 3 percent.
The figure below represents the U.S. market for steel imports from South Korea. The South Korean government provides an export subsidy of $25 per ton, and South Korean firms use the subsidy to reduce their export price to the United States to $375 per ton.
The change in national welfare in the United States when the South Korean government provides an export subsidy of $25 per ton is
A. + $375 million. B. + $4.125 billion. C. -$4.5 billion. D. - $3.75 billion.
Injections include all of the following except
A. Investment. B. Saving. C. Exports. D. Government spending.