In the short run, a sales tax is:
a. wholly absorbed by the producer.
b. shared between the consumer and the producer.
c. deferred until the market is able to re-establish an equilibrium price.
d. wholly absorbed by the consumer.
b
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Refer to Figure 4-9. What is the area that represents producer surplus after the imposition of the price floor?
A) B + E + F B) A + B + E C) B + E D) B + C + D + E
The sum of the value added of every firm involved in producing all final goods and services ________ gross domestic product
A) is sometimes greater than and other times less than B) equals C) is greater than D) is less than
"Government failure" is present when
a. constitutional restrictions block government action that is favored by the majority of voters. b. political decision-makers try to serve the general public rather than their personal interest. c. the structure of incentives encourages political decision-makers to undertake actions that conflict with the efficient allocation of resources. d. the political decision-makers are motivated by something other than good intentions; if they have good intentions, political action will allocate resources efficiently.
If the deficit is 0.08 times GDP, the existing debt-GDP ratio is 0.8, and the growth rate of nominal GDP is 0.05, then the change in the debt-GDP ratio is
A. +0.08. B. 0. C. -0.08. D. +0.04.