In the figure above, if an excise tax is imposed that generates an efficient allocation of resources, then the amount of output will be
A) zero.
B) 50 units.
C) 150 units.
D) 250 units.
C
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Expansionary policy only leads to inflation, but does not raise output in ________
A) traditional Keynesian theory B) new Keynesian theory C) real business cycle theory D) traditional Keynesian, new Keynesian and real business cycle theory
Some high-end retail stores that distribute mail-order catalogs will prominently offer some very high priced goods for sale (for example, a luxury sports car with gold-plated interior trim) in addition to their regular line of merchandise
Behavioral economists argue that the stores do not really plan to sell these goods, but they use these items to provide the customers with a high reference point for the prices of the other goods in the catalog. This practice is an example of: A) the ultimatim game. B) loss aversion. C) anchoring. D) none of the above
Compared to a proprietorship, an advantage of a partnership is
A) that profits are not taxed twice. B) double taxation. C) the ability to take advantage of greater specialization. D) the limited liability of the partners.
Assume that business investment spending rises, and the increase is funded by greater borrowing in the capital markets. If the nation has low mobility international capital markets and a fixed exchange rate system, what happens to the quantity of real loanable funds per time period and current international transactions in the context of the Three-Sector-Model?
a. The quantity of real loanable funds per time period falls and current international transactions become more negative (or less positive). b. The quantity of real loanable funds per time period rises and current international transactions become more negative (or less positive). c. The quantity of real loanable funds per time period and current international transactions remain the same. d. The quantity of real loanable funds per time period rises and current international transactions remain the same. e. There is not enough information to determine what happens to these two macroeconomic variables.