In the long run, the greater burden of a specific tax will usually be absorbed by:
a. consumers.
b. the party—consumers or producers—with the more elastic demand/supply curve.
c. the party with the least elastic demand/supply curve.
d. shareholders and employees of the firm in the form of reduced dividends and wages.
c
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The ratio at which a country can trade its exports for imports from other countries is called
A) a free trade agreement. B) the terms of trade. C) a trade barrier. D) autarky.
Suppose the cost of producing copper tubing is $1 per foot. If production costs were measured on the vertical axis and quantity of copper tubing were measured on the horizontal axis, which of the following lines would have the smallest slope?
a. a line representing the quantity of tubing measured in inches b. a line representing the quantity of tubing measured in feet c. a line representing the quantity of tubing measured in yards d. the 45-degree line e. any vertical line
If the recessionary GDP gap is $500, then the proper fiscal stimulus when faced with an upward-sloping AS curve is to
A. Shift the AS curve rightward by less than $500. B. Shift the AD curve rightward by $500. C. Shift the AD curve leftward by $500. D. Shift the AD curve rightward by more than $500.
The difference between the economic and political functions of government is that
A. the economic function is concerned with correcting for market failures while the political function is not. B. the economic function is concerned with the reallocation of income while the political function is not. C. the economic function is concerned with the Federal Taxation system while the political function is not. D. the economic function encourages merit goods while the political function discourages demerit goods.