Which of the following statements is FALSE about the issues faced by the government when contemplating a tax?
A) Consideration must be given to how tax rates relate to the amount actually received.
B) Consideration must be given to how taxes influence market prices.
C) Consideration must be given to how taxes influence equilibrium quantity.
D) Consideration must be given to the amount of funds the government will be receiving from the transfer payments paid by the public to the government.
Answer: D
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Refer to the scenario above. Recently, the government has imposed a tariff on the import of some cash crops. Which of the following is likely to happen in this case?
A) The domestic consumers of these crops will be better off. B) The government's revenue is expected to fall. C) The volume of imports is likely to increase. D) The domestic producers of these crops will be better off.
Suppose output is $1000 billion, government purchases are $200 billion, desired consumption is $700 billion, and desired investment is $150 billion. Net foreign lending would be equal to
A) -$150 billion. B) -$50 billion. C) $50 billion. D) $150 billion.