Refer to Figure 4-10. Suppose the market is initially in equilibrium at price P1 and now the government imposes a tax on every unit sold. Which of the following statements best describes the impact of the tax? For demand curve D1
A) the producer bears the entire burden of the tax if the supply curve is S2 and the consumer bears the entire burden of the tax if the supply curve is S1.
B) the producer bears a smaller share of the tax burden if the supply curve is S2.
C) the producer's share of the tax burden is the same whether the supply curve is S1 or S2.
D) the producer bears a smaller share of the tax burden if the supply curve is S1.
D
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Nominal interest rates are the
A) interest rates quoted in the market. B) real interest rates less the inflation rate. C) interest rates quoted in the market minus the inflation rate. D) interest rates quoted in the market plus the expected inflation rate.
The central bank of the European Union is called the
A) Federal Reserve. B) European Central Bank. C) Banco Europe. D) Bundesbank.
If the Federal Reserve purchases a $2,000 bond from a bond dealer who deposits the check in a bank, what changes will occur on that bank's balance sheet?
a. Reserves, demand deposits, total assets, and total liabilities will all increase by $2,000. b. Reserves and assets will increase by $2,000 . demand deposits and total liabilities will decrease by $2,000. c. Reserves and total assets will decrease by $2,000 . demand deposits and total liabilities will increase by $2,000. d. Reserves and total liabilities will decrease by $2,000 . demand deposits and total assets will increase by $2,000. e. Reserves and assets will increase by $2,000 . demand deposits and total assets will decrease by $2,000.
The base period is the time period used for comparative analysis.
Indicate whether the statement is true or false.