The government imposed a tax that reduced total consumer and producer surplus by five million dollars, resulting in a deadweight loss of one million dollars. How much tax revenue went to the government?
a. 11 million dollars
b. 6 million dollars
c. 4 million dollars
d. 1 million dollars
c. 4 million dollars
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How does the multiplier work and what might government use it for?
The gross public debt is the
A) amount of U.S. paper currency and coins in circulation. B) difference between current government expenditures and tax revenues. C) ratio of past deficits to past surpluses. D) total of all accumulated deficits and surpluses.
The economic efficiency rule requires production of the quantity of output where:
a. profit is maximized b. marginal social benefit is maximized c. marginal social benefit equals marginal social cost d. the excess of marginal social benefit over marginal social cost is maximized
What did Friedman and Phelps predict would happen if policymakers tried to move the economy upward along the Phillips curve? Did the behavior of the economy in the late 1960s and the 1970s prove them wrong?