Mention some of the problems incurred by black markets
What will be an ideal response?
Some of the problems that black markets incur are as below:
1. When they involve goods and services that have been legally banned, the black market undermines the ban.
2. When black market transactions occur in markets for legal goods and services in order to avoid taxes or regulations, they put legitimate businesses at a disadvantage.
3. To compensate for the lost revenue, governments must levy higher taxes.
4. Criminals spend vast resources trying to elude the law, which is not an effective use of society's resources.
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When the central bank increases the monetary base, the purchasing power of previously existing currency ________, and this essentially transfers wealth ________
A) increases; from those who own existing currency to the government B) decreases; from those who own existing currency to the government C) increases; from the government to those who own existing currency D) decreases; from the government to those who own existing currency
If the price elasticity of demand for a good is elastic, then consumers are relatively unresponsive with respect to the quantity purchased when the price changes
a. True b. False Indicate whether the statement is true or false
Which of the following is true? a. The quantity of money demanded varies inversely with the nominal rate of interest
b. Money market equilibrium occurs at that nominal interest rate where the quantity of money demanded equals the quantity of money supplied. c. Rising national income will shift the demand for money to the right, leading to a new higher equilibrium nominal interest rate. d. All of the above are true.
In this graph, why is there a loss?
a. ATC is equal to D at q*.
b. P* is less than ATC at q*.
c. ATC is more than the MR at q*.
d. P* is equal to D at 0.