When the government imposes a tax on the production of a commodity:
a. production will invariably increase.
b. the cost of production increases, so the supply curve shifts to the left.
c. the benefits of consumption increases, so the demand curve shifts to the right.
d. there is no change in demand or supply of the commodity.
e. both the demand and supply curves shift to the right.
b
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An economy with an expansionary gap will, in the absence of stabilization policy, eventually experience a(n) ________ in the inflation rate, leading to a(n) ________ in output.
A. decrease; increase B. increase; increase C. decrease; decrease D. increase; decrease
All of the following costs are included in the calculation of accounting profit, except
a. Interest payments on borrowed funds b. Costs paid to suppliers for product ingredients c. Opportunity cost of capital d. Depreciation expenses related to investments in buildings and equipment
Which of the following is most likely to reduce the consumption of an exhaustible natural resource?
a. a decrease in monopoly control of the market for the resource b. government tax policies that give tax breaks to entrepreneurs who search for new reserves of the resource c. implementation of a price ceiling for the resource below its equilibrium price d. government macroeconomic policies that lower the interest rate on bonds
If autonomous investment decreases by $60 billion, equilibrium real GDP demanded will
What will be an ideal response?