If the multiplier has a value of 1, then the value of the marginal propensity to save (MPS) is
A. 0.
B. 1.00.
C. 0.10.
D. 10.00.
Answer: B
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The major difficulty with using a tax on pollution instead of a fixed percentage reduction regulation is:
A. that it only works in theory. B. that firms would not pay the tax. C. establishing the optimal size of the tax. D. that it would cause prices to rise.
Refer to the scenario above. What is the nominal GDP of the economy in 2012?
A) $47,000 B) $56,000 C) $55,000 D) $49,500
According to this Application, after the government deceased cigarette taxes in several Canadian provinces in 1994, the decrease in the price of cigarettes in these provinces
A) increased the smoking rate by roughly 17 percent B) more than doubled the smoking rate. C) created no noticeable change in the smoking rate. D) was accompanied by a slight decrease in the rate of smoking.
If the price elasticity of demand for a good is 0.8, then a
A) 1 percent rise in the price leads to a 0.8 percent decrease in the quantity demanded. B) one dollar rise in the price leads to a 0.8 percent decrease in the quantity demanded. C) 1 percent rise in the price leads to an 80 percent decrease in the quantity demanded. D) 1 percent rise in the price leads to an 8 percent decrease in the quantity demanded.