Suppose the market demand curve is perfectly elastic in an increasing-cost industry. If an output tax of t per unit is imposed on all producers of the good, what happens to the market equilibrium outcome?
A) The price paid by buyers increases and output declines
B) The price paid by buyers does not change and output decrease
C) The price paid by buyers and output increase
D) The price paid by buyers and output decrease
B
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One of the tools of monetary policy is to change the discount rate. Since 2003
A) the Fed has not changed the discount rate. B) the Fed has pegged the discount rate to the reserve requirement. C) the Fed has kept the discount rate a fixed amount above the federal funds rate. D) the Fed has kept the federal funds rate one percentage point above the discount rate.
Which of the following would lead to an (eventual) increase in the labor force by shifting the labor demand curve?
a. A trend toward earlier retirement ages b. An increase in the working-age population c. A reduction in the number of guaranteed student loans d. An increase in college work-study programs e. A decrease in personal income tax rates