A tax in an efficient market:
A. increases efficiency.
B. decreases total surplus.
C. maximizes total surplus.
D. often fails to generate revenue.
B. decreases total surplus.
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Starting from long-run equilibrium, an increase in autonomous investment results in ________ output in the short run and ________ output in the long run.
A. lower; potential B. higher; higher C. lower; higher D. higher; potential
The price elasticity of demand for furniture is estimated at 1.3. This value means a one percent increase in the
A) price of furniture will increase the quantity of furniture demanded by 1.3 percent. B) price of furniture will decrease the quantity of furniture demanded by 1.3 percent. C) quantity of furniture demanded will decrease the price of furniture by 1.3 percent. D) quantity of furniture demanded will increase the price of furniture by 1.3 percent.
As a business type, corporations ________ in the United States
A) are subject to the least amount of taxes B) earn the majority of profits C) are the least common D) are the most common
One of the main roles of a central bank is:
A. managing the nation's money demand. B. coordinating the banking system to ensure a sound economy. C. accepting deposits from households and other private individuals. D. funding federal government spending.