A deadweight loss is a consequence of a tax on a good because the tax
a. induces the government to increase its expenditures.
b. induces buyers to consume less, and sellers to produce less.
c. increases the equilibrium price in the market.
d. imposes a loss on buyers that is greater than the loss to sellers.
b
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Inflation climbed steadily from 1952 to 1972. A time-series graph with inflation on the vertical axis and time (in years) on the horizontal axis would show
A) the rate of inflation as a horizontal line. B) that inflation was following a decreasing trend line. C) that inflation had a positive trend. D) that inflation had a negative trend.
Suppose firms expect future output to be higher and future interest rates to be higher. Given this information, how will firms alter investment in the current period? Explain
What will be an ideal response?