An example of a tax specifically designed to reduce consumption of a good is a tax on:
A. chocolate.
B. cigarettes.
C. coffee.
D. automobiles.
B. cigarettes.
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If the economy has a structural deficit of $25 billion and a cyclical deficit of $75, we can conclude that the current budget deficit is ________ billion
A) $75 B) $25 C) $0 D) $50 E) $100
Suppose a bank has $100 million in checking account deposits with no excess reserves and the required reserve ratio is 10 percent. If the Federal Reserve reduces the required reserve ratio to 4 percent, then the bank can make a maximum loan of
A) $0. B) $4 million. C) $6 million. D) $10 million.
The used car market may be inefficient because the purchase of a used car often involves
a. natural selection b. moral hazard c. hidden actions d. open-access resources e. hidden characteristics
After the American Civil War, many prominent Southerners lamented the fact that the South "overproduced" cotton and "underproduced" food. In fact, the South did import a very large percentage of its food. Nevertheless, rather than reduce cotton production and grow more food, Southern farmers did the opposite because
a. they were irrational and distraught over the loss of slavery. b. the South had a comparative advantage in cotton production. c. the North had a comparative advantage in cotton production. d. corn was absolutely cheaper to produce in the North.