A new toll of $0.50 per car is in place on a bridge, and 1,000 cars have used the bridge. Total tax revenues would be:
A. $500.
B. $2,000.
C. $1,000.
D. $5,000
A. $500.
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If the Federal Reserve lowers its target inflation rate, the monetary policy reaction function ________ and the aggregate demand curve ________.
A. shifts downward to the right; shifts to the left B. shifts downward to the right; shifts to the right C. shifts upward to the left; shifts to the left D. shifts upward to the left; shifts to the right
Everything else held constant, would an increase in volatility of stock prices have any impact on the demand for rare coins? Why or why not?
What will be an ideal response?
According to the Keynesian view, as interest rates fall
a. people will hold more money b. people will hold less money c. people will increase interest-yielding asset holdings d. the quantity demanded of investment goods will fall e. the economy's aggregate demand will contract
The purchasing power parity theory is not a good explanation of how nominal exchange rates are determined in the short run because:
A. there is no evidence that low inflation is associated with less rapid nominal exchange rate depreciation. B. most nominal exchange rates are fixed and foreign exchange markets do not bring the supply and demand for currencies into equilibrium. C. many goods and services are not traded internationally and not all internationally-traded goods are standardized. D. most goods and services are traded internationally and are standardized.