Which of the following statements is NOT true regarding subsidies?
A. Subsidies are like taxes in that they create deadweight loss.
B. Subsidies are like taxes in that they reduce sales of the subsidized good.
C. Subsidies are unlike taxes in that they increase sales of the subsidized good.
D. Subsidies are unlike taxes in that they reduce the price that buyers pay for a good.
B. Subsidies are like taxes in that they reduce sales of the subsidized good.
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Use the following production possibilities frontiers to answer the next question.
Curve (a) is the current frontier for the economy. Focusing on curve (a), point N suggests that the economy currently produces
A. less goods for the future than at point P. B. more goods for the future than at point P. C. less goods for the present than at point P. D. a combination of output that is less than its potential.
Which of the following would not be considered a market distortion:
a. minimum wage b. union-negotiated wage c. monopsony wage d. efficiency wage e. all of the above are market distortions
The deposit expansion multiplier is decreased if the Federal Reserve
A) buys government securities. B) sells government securities. C) lowers reserve requirements. D) raises reserve requirements.
To decrease buyer power, the firm can
a. Differentiate its product b. Decrease dependency on a single buyer c. Sell its products in locations with multiple buyers d. All of the above