To prevent cost-push inflation
A) there must not be an excess demand for money
B) interest rates must not rise
C) there must not be an increase in government purchases
D) the Fed must not let the quantity of money rise persistently.
Answer: D) the Fed must not let the quantity of money rise persistently.
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If the demand curve for a good is horizontal, a tax is levied on this product is
A) split between the buyers and the sellers but not evenly so that either the buyer or the seller pays more. B) split evenly between the buyers and the sellers. C) paid entirely by buyers. D) paid entirely by sellers. E) not paid by either the buyers or the sellers.
Why does the presence of negative externalities in the production of a good lead to an overproduction of the good?
What will be an ideal response?
The above figure shows the demand curve for movie rentals from Redbox. If Redbox raised its price from $2.50 to $3.00, between these two prices the price elasticity of demand equals
A) 1.2. B) 0.8. C) 2.0. D) 0.5.
In the above figure, suppose that the government sets a limit that may be produced of 10 units of output and the price rises to $4. The total deadweight loss would be
A) $0. B) $10. C) $15. D) $20.