Which of the following statements is false?
A) Consumers receive more consumers' surplus when tariffs do not exist.
B) Producers receive more producers' surplus when tariffs do exist.
C) A tariff results in a net loss to society.
D) With a tariff, the gains to the winners are less than the losses to the losers.
E) none of the above
E
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Joe quits his job as an insurance agent and opens his own sporting goods store. If his profits as measured by his accountant are greater than zero, then
A) he made a good move because he is earning above normal profits. B) his economic profit must be greater than zero. C) his opportunity costs must be zero. D) There is not enough information to determine his economic profit, if any.
Suppose that velocity and output are constant and that the quantity theory and the Fisher effect both hold. What happens to inflation, real interest rates, and nominal interest rates when the money supply growth rate increases from 5 percent to 10 percent?