If there is a decrease in demand for lettuce, we would expect:
A. both the price and quantity sold to increase.
B. both the price and quantity sold to decrease.
C. the price to decrease and the quantity sold to increase.
D. the price to increase and the quantity sold to decrease.
Answer: B
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Suppose policy makers want to increase Y and keep NX constant. Which of the following policies would most likely achieve this?
A) an increase in government spending B) a real depreciation C) an increase in government spending and a reduction in the real exchange rate D) a reduction in the real exchange rate E) encourage the country's trading partners to implement policies that will cause an increase in foreign income (Y)
An increase in the price of tickets to a popular sporting event will increase total revenue if:
A. There are many substitutes for this form of entertainment B. The ticket is considered to be a luxury C. The buyers of the tickets are fanatic about the event D. The fans are price-conscious
Compared to a negative income tax, the federal personal income tax is thought of as a way to promote greater equality. Why?
What will be an ideal response?
Being penalized via taxes for making more money in dollars even though your purchasing power hasn't changed at all is called:
A. tax distortion. B. shoe-leather costs. C. menu costs. D. the velocity of inflation.