When Airbnb customers in Malibu start paying hotel taxes, this will have the potential to ________ the equilibrium price in this market and, therefore, ________ efficiency
A) raise; increase B) raise; decrease C) lower; decrease D) lower; increase
B
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One drawback in using fiscal policy as a stabilization tool is that fiscal policy:
A. is not useful for dealing with prolonged episodes of recession. B. effects are frequently offset by automatic stabilizers. C. affects potential output as well as aggregate expenditure. D. is too flexible to use to close output gaps.
Monopolistically competitive firms achieve allocative efficiency but not productive efficiency
Indicate whether the statement is true or false
The classical dichotomy states that
A) money is superneutral. B) goods markets are separated from labor markets. C) demand is separate from supply. D) real markets determine nominal outcomes, not the reverse.
An expansionary policy does not alter: a. the price level in the short run
b. aggregate demand in the short run. c. inflation in the long run. d. unemployment in the long run.