Assume a unit tax of $4 is placed on suppliers. They are able to pass along some of the tax to suppliers as evidenced by prices rising from $5 per unit to $7 per unit. Output declines from 10 units to 8 units
What is the ratio of the demander's share of the tax burden to the suppliers? a. 2.5 b. 2.0 c. 1.5
d. 1.0
d
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When calculating GDP, underground economic activity is
A) the production of goods and services in the home. B) that portion of the time when we are enjoying leisure activities and not producing marketable goods. C) the part of the economy purposely hidden. D) an aspect of the quality of life, such as health and life expectancy.
How the price of a depletable resource changes over time depends on
a. how the technology of resource extraction changes. b. the interest rate. c. how the technologies of production change in firms that use the resource. d. All of the above are correct.
Which of the following is true of inflation?
A. It occurs when the demand for a particular currency is more than the supply B. It occurs when securities are purchased in one market for immediate resale in another. C. It occurs when two parties agree to exchange currency and execute a deal at a specific date in the future. D. It occurs when the quantity of money in circulation rises faster than the stock of goods and service. E. It occurs when output increases faster than the money supply.
If the money supply equals 2,000, velocity equals 3, and real GDP equals 4,000, then the price level equals:
A. 6,000. B. 2. C. 3. D. 1.5.