State government wants to increase the taxes on cigarettes to increase tax revenue. This tax would only be effective in raising new tax revenues if the price elasticity of demand is:
A. elastic.
B. inelastic.
C. perfectly elastic.
D. unity.
Answer: B
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People expect that the El Niño effect will cause drought in Australia in coming years. If most Australian firms expect their profits will fall during the next five years, Australia's ________ this year
A) aggregate demand will increase B) long-run aggregate supply will increase C) aggregate demand will decrease D) short-run aggregate supply will increase
The Open Market Trading Desk is
A) another name for the Federal Open Market Committee. B) an organization of private traders in government securities. C) the area on the floor of the New York Stock Exchange set aside for bond trading. D) a group of private securities traders that the Fed has selected to participate in open market operations.
How would a decrease in consumer income affect the market for lawn mowers?
a. Demand would decrease, leading to an increase in price and a reduction in quantity sold. b. Demand would decrease, leading to a reduction in price and a reduction in quantity sold. c. Demand would increase, leading to an increase in price and an increase in quantity sold. d. Demand would increase, leading to a reduction in price and an increase in quantity sold.
Is it possible for GDP to increase but for the standard of living to decrease? Explain.
What will be an ideal response?