With a temporary income tax surcharge, according to the ________, household consumption should ________
A) PIH; fall as disposable income falls
B) PIH; rise since the decrease is disposable income is temporary
C) LCH; fall since disposable income over the lifecycle falls
D) None of the above is correct since a temporary change affects neither permanent income or relative lifecycle earnings.
D
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If the government spending increases without an equal increase in taxes, the government must borrow funds in the financial markets
Indicate whether the statement is true or false
________ in the foreign interest rate causes the demand for domestic assets to shift to the right and the domestic currency to ________, everything else held constant
A) An increase; appreciate B) An increase; depreciate C) A decrease; appreciate D) A decrease; depreciate
The elasticities of the supply and demand curves in the market for cigarettes affect how much a tax distorts that market
a. True b. False Indicate whether the statement is true or false
The ultimate market constraint on the exercise of market power
A. Is barriers to entry. B. Is the demand curve facing the monopolist. C. Is the ATC curve facing the monopolist. D. Is marginal cost pricing.