When a tax is imposed on a good for which the supply is relatively elastic and the demand is relatively inelastic,
a. buyers of the good will incur most of the burden of the tax
b. sellers of the good will incur most of the burden of the tax.
c. buyers and sellers will each incur 50 percent of the burden of the tax.
d. the equilibrium quantity will increase.
a
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A firm can be the sole supplier of a good and is still not a monopolist if
A) the firm is not large. B) the good produced is not important to the economy. C) the firm is not making excessive profits. D) there are very close substitutes for the good.
If government increases its purchases by $20 billion and the MPC = 0.9, the resulting increase in the consumption component of AD is: a. $2 billion
b. $18 billion. c. $180 billion. d. $200 billion.
If there is a "long and variable time lag" between when a change in monetary policy is instituted and when it impacts aggregate demand and output, this will
What will be an ideal response?
A year-long drought that destroys most wheat crops for the season would shift the:
A. short-run aggregate supply curve only. B. aggregate demand curve only. C. aggregate demand curve, and the short-run aggregate supply curve would shift in response. D. short-run aggregate supply curve and the long-run aggregate supply curve.