A tax on gasoline is likely to
a. cause a greater deadweight loss in the long run when compared to the short run.
b. cause a greater deadweight loss in the short run when compared to the long run.
c. generate a deadweight loss that is unaffected by the time period over which it is measured.
d. none of the above is correct.
a. cause a greater deadweight loss in the long run when compared to the short run.
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The most likely impact of an unanticipated increase in the money supply is
a. an increase in the real interest rate, which in turn stimulates investment and GDP. b. a decrease in the real interest rate, which in turn stimulates investment and GDP. c. a reduction in the general level of prices, which will increase the disposable income of households. d. an improvement in technology, which will stimulate both output and employment.
Monetary policy affects aggregate demand with a lag. Approximately how long does it take for monetary policy actions to affect aggregate demand?
Suppose that an anti-smoking campaign in Moscow, Russia, is successful so that Muscovites smoke less and chew gum more. Tobacco companies lay off workers, while chewing gum manufacturers employ more workers. This is an example of
a. structural unemployment created by efficiency wages. b. structural unemployment created by sectoral shifts. c. frictional unemployment created by efficiency wages. d. frictional unemployment created by sectoral shifts.
Bob Smith's money wages rose from $32,000 to $48,000, while the CPI rose by 50%. His real wages
A. fell by 50%. B. stayed the same. C. rose by 25%. D. rose by 50%.