An increase in taxes (when Ricardian equivalence doesn't hold) causes the real interest rate to ________ and the price level to ________ in general equilibrium.
A. rise; rise
B. rise; fall
C. fall; rise
D. fall; fall
Answer: D
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If you pay a constant percentage of your taxable income in taxes, the tax is
A) regressive. B) random. C) proportional. D) progressive.
If actual real GDP is greater than the equilibrium level of real GDP (i.e., the aggregate expenditures function is below the 45-degree line), what happens to restore equilibrium to the economy?
Which of the following is not a requirement for price discrimination?
a. The firm must be able to identify consumers who are willing to pay more for the product. b. The firm must be able to prevent resale of the product. c. There must be a downward-sloping demand curve for the product. d. The firm must face different costs for the goods sold to different consumers.
In an efficient market without externalities,
A. price equals marginal private cost and is below marginal social cost. B. price equals marginal private cost and marginal social cost. C. price equals marginal private value and is below marginal external value. D. price equals marginal private value and marginal external value.