Refer to Figure 4-17. Suppose the market is initially in equilibrium at price P1 and then the government imposes a tax on every unit sold. Which of the following statements best describes the impact of the tax?
A) The consumer's share of the tax burden is the same whether the demand curve is D1 or D2.
B) The consumer will bear the entire burden of the tax if the demand curve is D2 and the producer will bear the entire burden of the tax if the demand curve is D1.
C) The consumer will bear a smaller share of the tax burden if the demand curve is D1.
D) The consumer will bear a smaller share of the tax burden if the demand curve is D2.
C
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The aggregate expenditure model focuses on the ________ relationship between real spending and ________.
a. short-run; real GDP b. short-run; inflation c. long-run; real GDP d. long-run; inflation
All else the same, if a bank's liabilities are more sensitive to interest rate fluctuations than are its assets, then ________ in interest rates will ________ bank profits
A) an increase; increase B) an increase; reduce C) a decline; reduce D) a decline; not affect
The international unit of accounting used by the International Monetary Fund (IMF) is called
A) the Eurodollar. B) the IMF dollar. C) the quota subscription. D) special drawing rights.
A market:
A. reflects upsloping demand and downsloping supply curves.
B. entails the exchange of goods, but not services.
C. is an institution that brings together buyers and sellers.
D. always requires face-to-face contact between buyer and seller.