When a country imposes a per-unit (ad-valorem) tariff on an imported good or service then, the price that domestic consumers pay for the import falls
Indicate whether the statement is true or false
false
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Price reductions will usually result whenever the quantity supplied exceeds the quantity demanded at the current price
a. True b. False Indicate whether the statement is true or false
Personal income and personal disposable income refer to payments ultimately flowing to:
A. firms. B. households. C. governments. D. foreigners.
What are the three sources of funding for the public sector? Can the government rely on all of these sources in the long run? Explain
What will be an ideal response?
To neutralize demand shocks, monetary policymakers shift the monetary policy reaction curve and thus effect changes in real interest rates to create offsetting changes in aggregate demand. However, in practice it is extremely difficult to keep inflation and output from fluctuating when aggregate expenditure changes. There are two reasons for this. First, it takes time to recognize what has happened. For example, changes in consumer or business confidence can be difficult to recognize as they are occurring. Second, the changes in interest rates that policymakers cause do not have an immediate effect on the economy. Thus, in theory, central bankers can neutralize aggregate demand shocks but in reality those shocks cause fluctuations in output and inflation.
a. True b. False