What would be the effect on the loanable funds market of an increase in the corporate profits tax? (Assume that the government maintains a balanced budget.)
a. The demand for funds would decrease, lowering the interest rate and leading to lower private investment.
b. The demand for funds would increase, raising the interest rate and leading to higher private investment.
c. Both the demand and the supply of funds would increase, lowering the interest rate and leading to lower private investment.
d. The supply of funds would increase, lowering the interest rate and leading to higher private investment.
e. The supply of funds would decrease, raising the interest rate and leading to lower private investment.
A
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In order to identify differences in preferences among various countries, one would look for evidence that
a. indifference curves from different countries cross.
b. prices for goods differ among countries.
c. different market baskets are chosen among different nationalities.
d. higher income countries choose baskets with more of all goods.
Under current antitrust laws, conglomerates are
a. illegal per se b. legal in the United States, but illegal internationally c. immune from prosecution d. legal only if they can show they are efficient e. illegal when necessities such as food are involved
Suppose during a year an economy produces $10 trillion of consumer goods, $4 trillion of investment goods, $6 trillion in government services, and has $4 trillion of exports and $5 trillion of imports. GDP would be:
A. $19 trillion. B. $21 trillion. C. $24 trillion. D. $29 trillion.
What is one reason activists might lobby the government for regulation limiting the production of a product to less than would normally be in a perfectly competitive market?
A) They value consumer surplus more than producer surplus. B) They value producer surplus more than consumer surplus. C) They seek to avoid future regulation. D) They seek to minimize total surplus.