Refer to Figure 18-2. If the government imposes an excise tax of $1.00 on every unit sold, the producer's burden of the tax
A) is Pa - Pd under either supply curve.
B) is Pa - Pd if the supply curve is S0 and Pb - Pe if the supply curve is S1.
C) is Pc - Pd if the supply curve is S0 and Pc - Pe if the supply curve is S1.
D) is Pb - Pe under either supply curve.
C
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The largest component of aggregate expenditure in the United States is:
A. consumption. B. government purchases. C. exports. D. investment.
In the Keynesian framework, as long as output is ________ the equilibrium level, unplanned inventory investment will remain ________, firms will continue to raise production, and output will continue to rise
A) below; negative B) above; negative C) below; positive D) above; positive
Describe, in general terms, the lags in the effects of monetary policy on interest rates, output, and prices. Be sure to note how long it takes each variable to respond to policy changes
What will be an ideal response?
Most policy makers agree that in the long run, changes in the money supply influence: a. the price level and inflation
b. the real interest rate and aggregate demand. c. the planned investment expenditure. d. the exchange rate. e. the potential GDP and unemployment.