Compared to a sales tax, a value-added tax is _____
a. easier to calculate
b. harder to collect
c. easier to apply to investment goods
d. easier to monitor
b
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Suppose the nominal interest rate is 4% and the rate of inflation is 3%. The real interest rate is therefore
A) 7%. B) 1%. C) 0%. D) -1%. E) none of the above.
A central bank may be reluctant to see its currency appreciate because
A) rising prices of imports will contribute to inflation. B) falling prices of exports will contribute to inflation. C) the country's goods may become uncompetitive in world markets. D) the country's monetary base will increase.
Which of the following statements is correct?
a. In the long run, both perfectly competitive firms and monopolistically competitive firms operate with excess capacity. b. A firm operates with excess capacity when, in the long run, its level of output is below the efficient scale. c. For any firm, efficient scale is the level of output at which the average-total-cost curve is tangent to the demand curve. d. All of the above are correct.
When production costs go_________________, the producer is usually able to produce more goods and services at each and every price in the market.
Fill in the blank(s) with the appropriate word(s).