A decrease in net taxes at a given price level leads to
A. a decrease in aggregate demand.
B. no change in aggregate demand.
C. a decrease in aggregate supply.
D. an increase in aggregate demand.
Answer: D
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Suppose two neighborhoods with 10 homes each in Buffalo, New York are identical except one of them is near a toxic waste dum
A) $400,000. B) $1,300,000. C) $900,000. D) $500,000. E) $90,000.
Suppose that in the market for paper, demand is p = 100 - Q. The private marginal cost is MCp = 10 + Q. Pollution generated during the production process creates external marginal harm equal to MCe = Q
What specific tax would result in a competitive market producing the socially optimal quantity of paper?
Eric is maximizing his total utility through his choices of two goods: clothes and food. His marginal utility of clothes is 60 and his marginal utility of food is 12 . The price of clothes is $20 . What must be the price of food?
a. 12. b. 6. c. 4. d. 1. e. 0.
When the Fed lowers the discount rate, it makes it:
A. cheaper for banks to borrow from each other. B. cheaper for banks to obtain additional reserves by borrowing from the Fed. C. more difficult for banks to accept deposits. D. more difficult for banks to extend loans.