If the government knew the precise values of the multiplier and potential income, fine-tuning the economy would
A. be much easier, but mistakes would still occur occasionally.
B. still be very difficult.
C. be possible.
D. be more difficult.
Answer: B
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The figure below represents the domestic market for wheat in a small country. Imports of wheat are prohibited.
With an export subsidy of $20 per bushel, the net loss in national well-being as a result of the export subsidy is
A. $500 million. B. $200 million. C. $2.2 billion. D. $300 million.
How does the imposition of a penalty for selling an illegal drug influence demand, supply, price, and the quantity of the drug consumed?
What will be an ideal response?
The central idea of supply-side tax cuts is that certain types of tax cuts will increase
a. aggregate demand. b. aggregate supply. c. the supply of imports. d. the supply of money.
Suppose that you have wheat in storage and that the price of wheat is currently $5.00 per bushel. You can sell your wheat immediately but you also have an opportunity to sell in six months. At that time, you believe the price of wheat will be $5.60 per bushel. Your cost of storage is $0.75 per bushel for six months. One dollar in six months is worth one dollar today (no discounting). What strategy is profit maximizing?
A. Hold onto your wheat and sell in six months. B. Sell your wheat today. C. Minimize your losses by exiting the wheat market. D. Expand production to sell more wheat.