A tax on beer will
A. lower the equilibrium price and raise the equilibrium quantity.
B. lower the equilibrium price and lower the equilibrium quantity.
C. raise the equilibrium price and raise the equilibrium quantity.
D. raise the equilibrium price and lower the equilibrium quantity.
Answer: D
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The short-run Phillips curve shows a relationship between the
A) unemployment rate and the interest rate. B) inflation rate and the interest rate. C) price level and real GDP. D) inflation rate and real GDP. E) inflation rate and the unemployment rate.
Refer to Table 26-2. Consider the hypothetical information in the table above for potential real GDP, real GDP, and the price level in 2016 and in 2017 if the Federal Reserve does not use monetary policy
If the Fed wants to keep real GDP at its potential level in 2017, it should A) increase income taxes. B) buy Treasury securities. C) increase the required reserve ratio. D) sell Treasury securities.
When the absolute price elasticity of demand is less than 1, demand is
A) elastic. B) unit-elastic. C) inelastic. D) undetermined without more information.
If Bob in Texas buys bonbons made in France for $25, and the French chocolatier buys stock in IBM for $25, then the French net exports:
A. and net capital outflow are both zero. B. and net capital outflow both equal $25. C. is zero and net capital outflow is $25. D. equals $25 and net capital outflow is zero.