If lower-income households spend a greater share of their income on cigarettes than do higher-income households, then a tax that raises the price of cigarettes will
A) cause lower-income households to incur a greater loss of consumer surplus than that incurred by higher-income households.
B) cause higher-income households to incur a greater loss of consumer surplus than that incurred by lower-income households.
C) raise consumer surplus among higher-income households.
D) cause consumer surplus to decline among smokers, but the relative impact cannot be determined from the given information.
D
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In the United States in 2014, the percentage of firms that employed between 3 and 199 workers and offered health insurance as a fringe benefit to the workers was about
A) 29%. B) 42%. C) 54%. D) 98%.
Answer the following statements true (T) or false (F)
1) An expansionary monetary policy is one that reduces the supply of money. 2) Changes in the interest rate are more likely to affect investment spending than consumer spending. 3) The job of the Fed in limiting the supply of money may be made more complex if commercial banks initially have substantial excess reserves. 4) When QE2 and Operation Twist were implemented, the Fed suspended its policy of forward commitment.