Between 1945 and 1950, the U.S. price level rose by one-third. This increase was complemented by which of the following?
(a) An increase in nominal and real GDP
(b) An increase in nominal GDP but a decrease in real GDP
(c) An increase in real GDP but a decrease in nominal GDP
(d) Stable nominal and real GDP
(b)
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If a good has a tax levied on it, sellers respond to the price that excludes the tax and not the price with the tax because
A) the tax is handed over to the state directly by buyers. B) sellers do not get to keep the tax revenue. C) the demand for the good has decreased. D) the quantity supplied of the good increases. E) demanders pay none of the tax.
Voluntary exchange increases economic efficiency
A) because neither the buyer nor the seller would agree to a trade unless they both benefit. B) because voluntary exchange only takes place with government permission. C) because it allows wealthy individuals to act altruistically and give to the poor. D) because it is free and consequently does not cost anything.
Vertical equity in taxation refers to the idea that people
a. in unequal conditions should be treated differently. b. in equal conditions should pay equal taxes. c. should pay taxes based on the benefits they receive from the government. d. should pay a proportional tax rather than a progressive tax.
If a country raises its budget deficit, then in the market for foreign-currency exchange
a. supply shifts left. b. supply shifts right. c. demand shifts left. d. supply shifts right.