A tax on a good whose demand is price elastic will be effective in discouraging consumption of that good.
Answer the following statement true (T) or false (F)
True
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In a persisting demand-pull inflation
A) aggregate demand increases and potential GDP decreases. B) aggregate demand decreases and aggregate supply decreases. C) aggregate supply decreases and aggregate demand increases. D) aggregate supply increases and aggregate demand increases. E) None of the above answers is correct.
When the free rider problem is present in a market:
A. what people pay often does not reflect the real value they put on a good. B. the good will likely be over consumed. C. the good is rival in consumption. D. the good is easily excludable.
Which of the following situations will result from a fall in the price level in the economy?
a. Consumption expenditure increases because of increase in purchasing power b. U.S. exports become less affordable to people in foreign countries c. Real GDP demanded decreases d. Government expenditure decreases at each income level
If a U.S. firm buys tulips from a Dutch firm and the Dutch firm uses the dollars it gets to buy U.S. stocks, the U.S. trade balance ________ and the U.S. financial account ________.
A. rises; rises B. falls; falls C. rises; falls D. falls; rises