In a "black market,"
A. suppliers take advantage of buyers.
B. price is illegally below market price.
C. only illegal goods and services are traded.
D. illegal trading at market prices takes place.
Answer: D
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While rent subsidies have some disadvantages, one advantage of rent subsidies is _____
a. administrative costs are low b. there is little chance of fraud c. the renter can chose from among different housing qualities d. renters have a strong incentive to shop carefully
Renewable resources are those for which
a. additional units can be purchased in the market b. additional units can be purchased in the market or provided by government c. worn-out units can be repaired for further use d. periodic use can be continued indefinitely e. additional sources are constantly being discovered
A year ago a country reduced the tax rate on all interest income from 40% to 10%. During the year private saving was $600 billion as compared to $500 billion the year before the tax reform. Taxes collected on interest income fell by $150 billion. Assuming no other changes in government revenues or spending which of the following is correct?
a. the substitution effect was larger than the income effect; national saving rose b. the substitution effect was larger than the income effect; national saving fell c. the income effect was larger than the substitution effect; national saving rose d. the income effect was larger than the substitution effect; national saving fell
Answer the following statements true (T) or false (F)
1) For an open mixed economy, the equilibrium level of GDP is determined where S a + I g + X = T + G. 2) Equal increases in government expenditures and tax collections will leave the equilibrium GDP unchanged. 3) A $10 billion decrease in taxes will increase the equilibrium GDP by more than would a $10 billion increase in government expenditures. 4) A lump-sum tax causes the after-tax consumption schedule to be flatter than the before-tax consumption schedule.