Correcting a market with an externality through taxation creates ________ total surplus compared to correcting it through a quota.
A. the same
B. more
C. less
D. Any of these statements could be true depending on whether the tax is imposed on the buyer or seller.
Answer: B
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When there is a recessionary gap, inflation will ________, in response to which the Federal Reserve will ________ real interest rates, and output will ________.
A. decline; lower; decline B. increase; raise; decline C. decline; lower; expand D. decline; raise; decline
A debit card is
A) money because it is a means of payment. B) not money but is used to transfer bank deposits which are money. C) money because it is generally accepted as a means of payment. D) not money because it is not officially issued by the government. E) part of the M2 money supply but not part of the M1 money supply.
Microeconomics can be used by governments to predict the impacts of a policy and suggest solutions to problems
What will be an ideal response?
If both borrowers and lenders anticipate the rate of inflation correctly, then
a. borrowers will lose real income. b. lenders will lose real income. c. both borrowers and lenders will lose real income. d. neither borrowers nor lenders will lose real income.