A tax of 10 units on the seller can be shown graphically as a
A. rightward shift of demand.
B. leftward shift of supply.
C. leftward shift of demand.
D. rightward shift of supply.
Answer: B
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A budget philosophy using fiscal policy to achieve the economy's potential GDP, rather than balancing budgets either annually or over the business cycle, is termed: a. budget finance
b. functional finance. c. crowding out. d. crowding in. e. deficit finance.
Assume that foreign capital flows into a nation rise due to expected increases in stock market appreciation. If the nation has highly mobile international capital markets and a fixed exchange rate system, what happens to the real risk-free interest rate and real GDP in the context of the Three-Sector-Model? a. The nominal exchange rate remains the same and monetary base rises
b. The nominal exchange rate remains the same and monetary base falls. c. The nominal exchange rate and monetary base fall. d. The nominal exchange rate and monetary base remain the same. e. There is not enough information to determine what happens to these two macroeconomic variables.
What happens if price falls below the market clearing price?
A. Supply shifts in. B. Demand shifts out. C. Quantity demanded decreases, quantity supplied increases, and a surplus results. D. Quantity demanded increases, quantity supplied decreases, and a shortage results.
When a group of people stand to gain from an action that is not rational for any of the members to undertake individually, it is referred to as a:
A. moral hazard problem. B. collective-action problem. C. societal-wellbeing problem. D. free-rider problem.