Your local government needs to increase tax revenue. To increase tax revenue it can either increase the property tax on commercial property or increase the property tax on all property. The government wants to impose the smallest excess burden possible. Because the demand for commercial property is ________ elastic than the demand for all property, you recommend that local government increase the property tax on ________ property.
A. less; commercial
B. more; all
C. less; all
D. more; commercial
Answer: B
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Based on the figure below. Starting from long-run equilibrium at point C, a tax cut that increases aggregate demand from AD to AD1 will lead to a short-run equilibrium at point ________ and eventually to a long-run equilibrium at point ________, if left to self-correcting tendencies. 
A. D; C B. B; C C. B; A D. D; B
According to rational expectations theory, forecast errors of expectations
A) are more likely to be negative than positive. B) are more likely to be positive than negative. C) tend to be persistently high or low. D) are unpredictable.
Individuals who are more risk averse
a. buy less insurance b. buy more insurance c. are not more or less inclined to buy insurance d. are philosophically opposed to insurance
Which of the following monetary policies will increase money supply?
a. An increase in the discount rate b. An increase in the reserve requirement c. Open market purchases by the Fed d. The Fed selling government bonds e. An increase in the federal funds rate