Suppose a legislation passed by the government encourages domestic oil exploration thereby reducing petroleum imports substantially. If the cost of production is uniform for all producers, which of the following will be observed in the petroleum market?
a. The world price of petroleum would decline.
b. The domestic price of petroleum would decline.
c. The world price of gasoline will remain unaffected.
d. Crude oil consumption in the domestic and the world market would decrease.
C
Economics
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If the government replaces a lump sum tax with a proportional labor income tax, then
A) employment and output increase. B) employment increases and output decreases. C) employment decreases and output increases. D) employment and output decrease.
Economics
If the nominal interest rate is 20% per year, how much money can an individual borrow today if she wants to repay $100 in one year?
A) $80.00 B) $83.33 C) $120.00 D) $78.00 E) $121.00
Economics