If the exchange rate is defined as the price of the foreign currency in terms of the domestic currency, an increase in the exchange rate:
a. increases domestic demand for foreign goods.
b. makes domestic goods cheaper in the foreign markets.
c. lowers net exports.
d. lowers aggregate expenditure on domestic goods.
e. increases the domestic country's external debt burden.
b
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The value of the price elasticity of supply depends primarily on how quickly firms can acquire inputs to increase quantity supplied when price increases
Indicate whether the statement is true or false
If a price searcher is producing at a level of output such that its marginal cost is $16 and its marginal revenue is $9, the firm should
a. increase output in order to reduce per-unit costs. b. decrease the price of its product and expand output. c. increase price and reduce its rate of output. d. reduce both price and output.
A direct tax is on a _____, while an indirect tax is on a _____.
Fill in the blank(s) with the appropriate word(s).
Which of the following best reflects the ability-to-pay philosophy of taxation?
A. A tax on residential property. B. A progressive income tax. C. An excise tax on gasoline. D. An excise tax on coffee.