A per-unit government tax on producers of a good tends to
A) reduce the supply of the good.
B) increase the supply of the good.
C) cause an upward movement along the supply curve.
D) not have any effect on the good's supply.
Answer: A
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The price rationing mechanism of a freely functioning market leads to the most efficient use of resources because
A) all gains from mutually beneficial trade are captured. B) the Federal Trade Commission regulates the market. C) of the rise of the legislative apparatus that supports trade. D) the Justice Department monitors market activities.
Which of the following would cause the U.S. dollar to depreciate against the Japanese yen?
A. greater popularity of U.S. exports in Japan B. a higher price level in Japan C. higher real interest rates in the United States D. higher incomes in the United States
Suppose the government increases government spending. Which of the following will tend to occur as a result of this policy in a Keynesian model?
A. an inflationary gap B. a movement along the short-run aggregate supply curve C. demand-pull inflation D. all of these
If resource prices are fixed and the selling price rises, then
a. profits will decrease. b. profits will increase. c. profits will remain constant. d. both profits and output will decrease.