Exchange rate pegs are popular with developing countries because they increase credibility
Indicate whether the statement is true or false
TRUE
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Refer to Figure 4-15. As a result of the tax, is there a loss in consumer surplus?
A) No, because the producer pays the tax. B) No, because the market reaches a new equilibrium C) No, because consumers are charged a lower price to cover their tax burden. D) Yes, because consumers pay a price above the economically efficient price.
The incidence of a payroll tax is borne by both employers and employees
a. True b. False Indicate whether the statement is true or false
Explain why current account deficits may or may not be harmful to a country
What will be an ideal response?
If the marginal propensity to consume (MPC) is 0.80, and if policy makers wish to increase real GDP by $200 million, then by how much would they have to change taxes?
a. -$240 million b. -$200 million c. -$180 million d. -$50 million