Answer the following questions true (T) or false (F)
1. Ceteris paribus, a real depreciation of the dollar will decrease net exports in the United States.
2. The income effect of a price change refers to the change in the quantity demanded of a good that results from a change in purchasing power as a result of the price change.
3. Chips and salsa are complements. If the price of salsa decreases, the demand for chips will increase.
1. FALSE
2. TRUE
3. TRUE
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What is the rationale behind a cap-and-trade emission allowance system?
A) It creates a market for externalities. B) It disciplines polluting firms by specifying the maximum amount of emissions allowed and gives them permits to pollute up to their allowance. C) It provides firms with the incentive to consider less costly alternatives to pollution reduction by making firms pay for the right to pollute beyond their specified allowance. D) It raises revenue for the government through the sale of permits.
One advantage of ad valorem taxes over unit taxes is that _____
a. the tax is more difficult to evade b. the tax is easier to collect c. the tax increases with inflation d. the tax automatically adjusts for inflation
Tiffany has just graduated from Stanford University and has applied for a job as an engineer at a manufacturing plant. The manufacturer decides to offer Tiffany a job because it perceives she's gained valuable skills while at Stanford. To which of the following views of education does the manufacturer subscribe?
a. signaling b. human-capital view c. compensating-differentials d. superstar
The portion of the Obama stimulus package that bolstered state welfare plans is best thought of as
A. monetary policy. B. nondiscretionary fiscal policy. C. discretionary (and expansionary) fiscal policy. D. discretionary (and contractionary) fiscal policy.