Can macroeconomic policy be used systematically to create unanticipated inflation?
A. No, according to Keynesian economists.
B. Yes, according to classical economists.
C. Yes, according to Keynesian economists, if Ricardian equivalence holds.
D. No, according to classical economists.
Answer: D
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To determine whether McDonald's hamburgers are in the same market as Domino's pizza, the criterion we use is their
a. price elasticities of demand b. price elasticities of supply c. income elasticities of demand d. cross elasticities e. equilibrium prices
Which of the following statements is correct regarding the imposition of a tax on gasoline?
a. The incidence of the tax depends upon whether the buyers or the sellers are required to remit tax payments to the government. b. The incidence of the tax depends upon the price elasticities of demand and supply. c. The amount of tax revenue raised by the tax depends upon whether the buyers or the sellers are required to remit tax payments to the government. d. The amount of tax revenue raised by the tax does not depend upon the amount of the tax per unit.
Suppose that a community seeks to preserve air quality, and zones a “green belt” around the city, which prevents property development within the belt. What is the most likely result of this law?
A. Interest rates will increase. B. Labor income will increase. C. Economic rent will increase. D. Profits will increase.
If a U.S. importer has to write a $200 check to cover a 20,000 yen purchase from Japan, the exchange rate is
A. 200 yen to a dollar. B. 100 yen to a dollar. C. 20 yen to a dollar. D. 10 yen to a dollar.