Suppose the government imposes a 50-cent tax on the sellers of packets of chewing gum. The tax would
a. shift the supply curve upward by less than 50 cents.
b. raise the equilibrium price by 50 cents.
c. create a 50-cent tax burden each for buyers and sellers.
d. discourage market activity.
d
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In an economy where aggregate spending is given by Y = 3,000 + .75Y - 10,000 r, the central bank is currently setting the interest rate at 0.06 (6 percent). If potential output equals 9,500, the central bank must ________ the interest rate to close the ________ gap.
A. raise; expansionary B. lower; recessionary C. lower; expansionary D. raise; recessionary
A current account deficit can occur if ________, all else equal
A) net national savings equals zero B) net factor income from abroad equals zero C) net exports are negative D) net investment income is negative
Autarky refers to
A) a situation in which there is no trade. B) the equilibrium a nation reaches after trade begins. C) a situation in which nations trade goods and services. D) the location on a consumption possibilities curve.
In the long run, price elasticities of demand are usually __________
a. less than they are in the short run because people can adjust b. the same as they are in the short run because tastes don't change c. greater than they are in the short run because prices rise over time d. less than they are in the short run because real prices fall over time e. greater than they are in the short run because consumers have time to adjust