A tax on gasoline often reduces road congestion because gasoline
a. and driving are complements.
b. and driving are substitutes.
c. is a normal good, while driving is an inferior good.
d. is an inferior good, while driving is a normal good.
a
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To fully analyze the effects of a tariff on imports of tomatoes, an economist needs
a. only to know the supply and demand curves in the market for tomatoes. b. only to know about supply and demand in the market for tomatoes and in markets for other products tomato farmers grow. c. to use general equilibrium analysis. d. to use a production possibilities curve.
A market in which businesses, households, and governments buy and sell national currencies is
A) the foreign exchange market. B) the currency exchange market. C) the money exchange market. D) the dollar exchange market.
If the price level is fixed, then changes in nominal income will be equivalent to changes in real income
a. True b. False Indicate whether the statement is true or false
If the public decides to hold less currency and more deposits in banks, bank reserves
a. decrease and the money supply eventually decreases. b. decrease but the money supply does not change. c. increase and the money supply eventually increases. d. increase but the money supply does not change.