Increased investment spending in the economy would be a possible result of:
A. an increase in interest rates.
B. an open market purchase of bonds by the Fed.
C. an open market sale of bonds by the Fed.
D. a decrease in the money supply.
Answer: B
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If the supply curve is perfectly inelastic and the demand curve is a downward sloping straight line, what is the effect of a consumer ad valorem tax on equilibrium price and quantity?
A) Price remains unchanged and quantity increases. B) Price decreases and quantity increases. C) Price decreases and quantity remains unchanged. D) Price and quantity decrease.
Under perfect competition
A. no firm has any influence over price. B. firms are price takers, not price makers. C. many firms produce identical products. D. All of the choices are true under perfect competition.
The funds that polluters pay that gives them the right to discharge into the air or water a certain amount of pollution are
A) special subsidies. B) regulation fees. C) external costs. D) effluent fees.
Graphically, deadweight loss is shown by the:
A. welfare loss rectangle. B. welfare loss triangle. C. consumer surplus loss triangle. D. tax revenue rectangle.