A $0.2 trillion increase in government purchases increases the quantity demanded by $1.0 trillion, price level remaining constant. This additional spending reflects the _____ effect

Describe the conditions under which monopoly exists. Give two examples

What will be an ideal response?

During recent elections, consumer groups in various states attempted to get the sales tax on all medicines and drugs removed. They argued that such a tax is "severely regressive." What is the economic interpretation of their statement?

a. The poor get ill more often than do the rich. b. The poor pay higher prices for medicine and drugs than do the rich. c. The poor pay a higher percentage of their income for medicine and drugs than do the rich. d. All consumers pay too much money for medicine and drugs. e. The sales tax discourages the poor from seeking medical treatment.