Suppose consumer income increases. If grass seed is a normal good, the equilibrium price of grass seed will
a. decrease, and producer surplus in the industry will decrease.
b. increase, and producer surplus in the industry will increase.
c. decrease, and producer surplus in the industry will increase.
d. increase, and producer surplus in the industry will decrease.
b
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If a large open economy, like the United States, reduces its budget deficit, what impact would this have on a small open economy?
A) higher savings B) increased investment C) increased net savings D) no change in interest rates
Suppose that the U.S. government budget deficit decreases. What curves in the open-economy macroeconomic model shift? Explain why each curve shifts the direction it does
The specificity rule states that
A. Tax rates should vary according to specific characteristics of a product. B. it is more efficient to use a policy tool that is closer to the distortion that is caused by an externality. C. a government tax is the best remedial measure for an externality. D. property rights must be changed to correct for an externality.
Which of the following shifts in the demand for money or the supply of money is most likely to occur as the result of a recession?
A. The supply curve shifts rightward. B. The demand curve shifts rightward. C. Both the demand and supply curves shift rightward. D. The demand curve shifts leftward.