When a good is taxed,
a. both buyers and sellers of the good are made worse off.
b. only buyers are made worse off, because they ultimately bear the burden of the tax.
c. only sellers are made worse off, because they ultimately bear the burden of the tax.
d. neither buyers nor sellers are made worse off, since tax revenue is used to provide goods and services that would otherwise not be provided in a market economy.
a
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The automobile industry is an oligopoly.
Indicate whether the statement is true or false.
Suppose the equilibrium real federal funds rate is 2 percent, the target rate of inflation is 2 percent, the current inflation rate is 4 percent, and real GDP is 2 percent above potential real GDP
If the weights for the inflation gap and the output gap are both 1/2, then according to the Taylor rule the federal funds target rate equals A) 4 percent. B) 6 percent. C) 8 percent. D) 10 percent.
The measure of the aggregate price level that is frequently the focus of Federal Reserve officials is the
A) consumer price index. B) producer price index. C) GDP deflator. D) PCE deflator.
The Earned Income Tax Credit replaced many government transfer programs
a. True b. False