When the government passes a law making a particular good illegal, does it matter for the black market price and quantity if the penalties for breaking the law are imposed on the buyers or on the sellers?
What will be an ideal response?
Yes, it matters. Imposing penalties on the buyers shifts the demand curve leftward. Imposing penalties on the sellers shifts the supply curve leftward. Either penalty decreases the quantity, but the black market price will exceed the legal market price if only the seller is penalized and will be below the legal market price if only the buyer is penalized.
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When inflation increases at a ________ rate, the money someone holds will ________ every day
A) high; buy more B) high; buy less C) low; buy less D) low; buy more
What is the difference between net exports and the current account balance?
What will be an ideal response?
For the period we are studying (1789–1860), the United States
(a) was a high tariff, protectionist nation. (b) derived the vast majority of federal revenues from the tariff. (c) was divided on the question of the tariff, with the South generally in opposition to it. (d) was characterized by all of the above.
The exchange-rate arrangement that emerged from the Bretton Woods conference is often referred to as the:
a. dollar exchange standard. b. euro exchange standard. c. gold exchange standard. d. silver exchange standard. e. flexible exchange rate standard.