If the tax multiplier is -1.5 and a $200 billion tax increase is implemented, what is the change in GDP, holding everything else constant? (Assume the price level stays constant.)

A) a $133.33 billion increase in GDP
B) a $133.33 billion decrease in GDP
C) a $30 billion increase in GDP
D) a $300 billion decrease in GDP
E) a $300 billion increase in GDP


D

Economics

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The market implications of taste-based discrimination were in part developed by:

A) Gary Becker. B) Amartya Sen. C) Simon Kuznets. D) Paul Samuelson.

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You know an economist has crossed the line from policy adviser to scientist when he or she

a. claims that the problem at hand is widely misunderstood by non-economists. b. makes positive statements. c. talks about values. d. makes a claim about how the world should be.

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Figure 7-14


Of the long-run AC curves in Figure 7-14, which displays increasing returns to scale for all levels of output?

a.
1

b.
2

c.
3

d.
4

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Suppose that 75 percent of a cigarette tax is borne by consumers. If the supply elasticity is 1, the demand elasticity is equal to:

A. 1/2. B. 1. C. 1/3. D. 1/4.

Economics