Following an expansionary monetary policy, we would expect lower interest rates, dollar
A. depreciation, and an increase in the current account deficit.
B. depreciation, and a decrease in the current account deficit.
C. appreciation, and an increase in the current account deficit.
D. appreciation, and a decrease in the current account deficit.
Answer: B
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Suppose the market for grass seed is expressed as:
Demand: QD = 100 - 2p Supply: QS = 3p Price elasticity of supply is constant at 1. If the supply curve is changed to Q = 8p, price elasticity of supply is still constant at one. Yet with the new supply curve, consumers pay a larger share of a specific tax. Why?
Suppose a chemical plant in Warzonka produces a by-product that is extremely toxic. The by-product is fatal to plant and animal life upon direct contact, and low-level contamination of the by-product in the environment is linked to cancer. Which of the following would be the best choice for public policy in this case?
a. Command-and-control regulation b. A corrective tax c. A property tax d. A tradable permit system
If there are diminishing returns to capital, then
a. capital produces fewer goods as it ages. b. old ideas are not as useful as new ones. c. increases in the capital stock eventually decrease output. d. increases in the capital stock increase output by ever smaller amounts.
When an economist states that "price changes cause quantity changes ceteris paribus", she is stating that price changes cause quantity changes
A. only in theory. B. always. C. all else equal. D. only in efficient markets.