If the government imposes an excise tax on gasoline equal to $0.25 per gallon and the demand curve for gasoline is downward-sloping, the supply of gasoline will:
A. shift upward and the price will increase by $0.25 per gallon.
B. shift upward and the price will increase by less than $0.25 per gallon.
C. shift downward and the price will decrease by less than $0.25 per gallon.
D. shift downward and the price will decrease by $0.25 per gallon.
Answer: B
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The Fed wants to keep the dollar at 0.80 euros per dollar. If the demand for dollars increases,
A) the Fed sells dollars to increase the supply of dollars and maintain the exchange rate. B) the Fed conducts persistent intervention on one side of the market. C) the Fed buys dollars to increase the supply of dollars and maintain the exchange rate. D) the Fed buys dollars to decrease the supply of dollars and maintain the exchange rate. E) the Fed sells dollars to decrease the supply of dollars and maintain the exchange rate.
Which consequence is least likely to follow from an increase in the price of gasoline?
A) Decreased demand for automobile tires B) Decreased demand for gasoline C) Increased demand for airline tickets D) Increased demand for fuel-efficient cars E) Increased demand for public transportation
Holding other things constant, a depreciation of the US Dollar relative to the Kenyan Shilling would cause the demand for the Shilling to _____________ and the supply for Shilling to __________
a. Increase; decrease b. Increase, increase c. Decrease; Increase d. Decrease; Decrease
Financial intermediaries are best described as:
a. informal institutions that provide funds to the government to manage budget deficits. b. institutions that accept deposits and make loans. c. institutions that control the money supply in the economy. d. institutions that provide financial aid to foreign countries. e. individuals who manage other's investment portfolios.