If a balanced budget were required in 2008, the government would have been required to cut spending and increase taxes
a. True
b. False
Indicate whether the statement is true or false
True
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The incidence of a per-unit tax on a good is identical for buyers and sellers of the good if:
A) the buyers and sellers of the good are equally sensitive to price changes. B) the elasticity of market demand exceeds the elasticity of market supply. C) the market supply curve is flatter than the market demand curve. D) the market demand curve is horizontal.
The nominal price of industrial red paint was $12 per gallon in 1993. To convert this value to the real price of paint in 2012 dollars, we should use the:
A) Consumer Price Index. B) Producer Price Index C) Fed funds rate. D) 30-day T-bill rate.
Wheat is being grown and sold at the lowest possible average cost. Which of the following does this situation illustrate?
a. Productive efficiency b. Market elasticity c. Allocative efficiency d. Perfect competition
A simplifying assumption is typically made so as to
A. divert attention from the real problem. B. make things look better than they really are. C. make a point clearer by stripping away excess detail. D. make a point clearer by adding sufficient detail to get things precise.