Demand for a product is given by Q = 200 - P and supply is given by Q = 0.5P - 10. If the quantity demanded rises by 10 units at every possible price, then the equilibrium quantity will be
a. 40 units
b. 50 units
c. 60 units
d. 100 units
c. 60 units
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Which of the following statements concerning the federal corporate income tax is true?
A) It is an efficient tax because it imposes a small excess burden relative to the tax revenue it raises. B) The corporate income tax is an example of the benefits-received principle. C) The incidence of the corporate income tax can be determined by using demand and supply analysis. D) Determining the incidence of the corporate income tax is complicated because it is not certain how corporations respond to the tax.
An open-market purchase of foreign bonds to increase a central bank's international reserves:
A. increases the central bank's liabilities and decreases its assets. B. increases the central bank's liabilities and assets. C. decreases the central bank's assets and liabilities. D. increases the central bank's assets but decreases its liabilities.
Which of the following is NOT a characteristic of a financial crisis caused by macroeconomic imbalances?
A) Crises can be unpredictable. B) Crises can be predictable. C) Crises can by expansionary fiscal policies accompanied by high budget deficits. D) Crises can be caused by budget surpluses.
The GDP deflator in year 3 is 85 using year 1 as a base year. This means that, on average, the price of goods and services is
A. 7.5% higher in year 3 than in year 1. B. 15% higher in year 1 than in year 3. C. 7.5% higher in year 1 than in year 3. D. 15% higher in year 3 than in year 1.