How is producer surplus changed by the introduction of tariffs on imported shoes as shown in Exhibit 1?
a. loss of areas c, d, e, and f
b. loss of areas d and e
c. gain of area c
d. gain of area g
c. gain of area c
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Recent studies on the effectiveness of fiscal policy tend to suggest that the government spending multiplier is less than 1.0
a. True b. False Indicate whether the statement is true or false
Legalizing all forms of illegal activities
A) reduces GDP and reduces the size of the underground economy. B) reduces GDP and increases the size of the underground economy. C) increases GDP and reduces the size of the underground economy. D) increases GDP and increases the size of the underground economy.
A-1 bank initially has no excess reserves. If the desired reserve ratio is 10 percent and a new deposit of $10,000 is made in A-1, then A-1
A) can immediately loan $9,000. B) is required to hold the deposit in its reserves. C) can immediately loan $100,000. D) can immediately loan a multiple of the $10,000. E) can immediately loan $10,000.
According to the kinked demand theory, when one firm raises its price, other firms will:
a. also raise their prices. b. refuse to follow. c. increase their advertising expenditures. d. exit the industry.