The incidence of cigarette taxes falls mainly on
A. smokers.
B. retail sellers of cigarettes.
C. cigarette producers.
D. people who are no longer exposed to second-hand smoke.
Answer: A
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If a 6 percent increase in income leads to a 4 percent increase in quantity demanded for audio books, the income elasticity of demand is
A) -0.67. B) 0.67. C) 1.5. D) 2.
What is the domestic price of a TV in a closed economy?
A. $75 B. $137.50 C. $100 D. $125
The financing of a government deficit increases interest rates and, as a result, reduces investment spending. This statement describes:
A. the net export effect. B. the crowding-out effect. C. the supply-side effects of fiscal policy. D. built-in stability.
A high unemployment rate most likely means that there is a:
A. high rate of inflation in the economy. B. large GDP gap in the economy. C. low rate of interest in the economy. D. small GDP gap in the economy.