Suppose the federal government doubles the gasoline tax. The deadweight loss associated with the tax
a. also doubles.
b. triples.
c. quadruples.
d. rises by a factor of 8.
c
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In the figure above, in the long run what happens if the Fed increases the quantity of money by 5 percent?
A) The value of money rises by 5 percent. B) The nominal interest rate rises by 5 percent. C) The price level rises by 5 percent and the LRMD shifts leftward. D) The value of money falls by 5 percent and there will be a movement down along the LRMD curve. E) The real interest rate falls and the LRMD curve shifts rightward.
Unemployment insurance could affect unemployment by:
A. increasing the equilibrium level of unemployment. B. decreasing the amount of frictional unemployment. C. changing the incentives of those unemployed and looking for work. D. All of these are true.
The largest sector in the consumer price index market basket is food and beverage purchases
a. True b. False Indicate whether the statement is true or false
If consumers view cappuccinos and lattés as substitutes, what would happen to the equilibrium price and quantity of lattés if the price of cappuccinos falls?
a. Both the equilibrium price and quantity would increase. b. Both the equilibrium price and quantity would decrease. c. The equilibrium price would increase, and the equilibrium quantity would decrease. d. The equilibrium price would decrease, and the equilibrium quantity would increase.