Assume that beer is a normal good. If the price of beer rises, then the substitution effect results in the person buying ________ of the good and the income effect results in the person buying ________ of the good
A) more, more
B) more, less
C) less, more
D) less, less
D
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Suppose the savings rate is 15 percent. For every dollar the government collects in tax revenue and spends on public goods and infrastructure, the net result will be _____.
(A) An increase in total investment by 85 cents. (B) A decrease in total investment by 15 cents. (C) An increase in total investment by 15 cents. (D) No change in the total investment.
When the Fed raises the required reserve ratio, then the:
a. ability of banks to make loans is restricted. b. ability of banks to make loans is enhanced. c. ability of banks to make loans is unaffected. d. interest rate that banks pay to the Fed to borrow money is increased. e. interest rate that banks pay to other banks to borrow money is increased.
How can tariffs lead to a situation in which all parties to a trade lose?
What will be an ideal response?
In order for a Pigovian tax to be effective, it must:
A. be imposed on the consumer. B. be imposed on those affected by the externality. C. be imposed on the producer. D. None of these statements is true.