The demand for curve for money
a. shows the amount of money people actually hold
b. shows the amount of money people would like to hold, given the constraints they face
c. shifts if the interest rate changes
d. is independent of the price level
e. changes whenever the Fed changes the money supply.
B
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Producer surplus is the difference between the highest price someone is willing to pay and the price he actually pays
Indicate whether the statement is true or false
One of the justifications of government stabilization policy is that it may
a. increase the fluctuations in inflation and employment. b. increase the multiplier effect of changes in autonomous spending. c. increase the volatility of economic variables. d. reduce the severity of inflation and unemployment.
Suppose that the market for large, 64-ounce soft drinks in the town of Pudgyville is characterized by a typical, downward-sloping, linear demand curve and a typical, upward-sloping, linear supply curve. The market is initially in equilibrium with 1,000 soft drinks sold per day. The newly-elected Mayor of Pudgyville wants to tax 64-ounce soft drinks. She is considering either a $0.10 tax or a
$0.30 tax. Her chief economic advisor estimates that the number of soft drinks sold after a $0.10 tax will be 900 and after a $0.30 tax will be 500 . Which tax is better? a. The $0.10 tax is better because it raises more revenue and creates a lower deadweight loss than the $0.30 tax. b. The $0.30 tax is better because it raises more revenue and creates a lower deadweight loss than the $0.10 tax. c. It is not clear which tax is better because although the $0.30 tax raises more tax revenues, it creates a larger deadweight loss than the $0.10 tax. d. It is not clear which tax is better because although the $0.10 tax raises more tax revenues, it creates a larger deadweight loss than the $0.30 tax.
Which of the following statements is most correct?
A. If the U.S. $ is depreciating relative to the euro it is likely depreciating relative to all currencies. B. If the U.S. $ is appreciating relative to the euro, the euro is likely depreciating relative to the yen. C. If the U.S. $ depreciates relative to the yen, then it is likely also depreciating relative to the euro. D. If the U.S. $ is appreciating relative to the yen, the yen is depreciating relative to the U.S. $.