Rhode Island has enacted a substantial increase in the tax on employers that finances the workman's compensation system. For some employers, the tax is about $25 per $100 paid in wages. Employers claim they cannot afford to pay the tax. Under which of the following conditions will the actual burden of the tax fall on employers?
a. The employers' demand for labor is perfectly elastic.
b. The supply of labor is perfectly inelastic.
c. The employers' demand for labor is perfectly inelastic.
d. The demand for the good they produce must be perfectly inelastic.
c
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Which is the most likely effect upon the market for cotton of a significant improvement in the quality of synthetic textiles?
A) A decrease in demand and hence a decrease in both the price of cotton and the quantity exchanged. B) A decrease in demand and hence a decrease in the price of cotton and an increase in the quantity exchanged. C) A decrease in demand and hence an increase in the price of cotton and a decrease in the quantity exchanged. D) A decrease in both demand and supply and hence a decline in the quantity exchanged but no predictable change in the price of cotton.
A critical assumption for the simple money multiplier (1/ rrd) to hold is that
a. banks do not hold excess reserves. b. the public does not increase their level of currency holdings. c. the required reserve ratio has to be greater than one. d. both a and b. e. all of the above.
The interest rate on a bond is
A) inversely related to its price. B) directly related to its price. C) determined by its face value. D) determined by the time to maturity.
According to the law of supply, there is a
A. positive relationship between price and the quantity of a good supplied. B. negative relationship between price and the quantity of a good supplied. C. positive relationship between price and the change in supply. D. negative relationship between price and the change in supply.