According to the interest rate effect, as the price level rises,:
A. people feel poorer and buy less.
B. United States products become more expensive and foreigners buy less U.S. goods.
C. interest rates fall, and people buy less.
D. interest rates rise, and people buy less.
Answer: D
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If the price of gasoline were $5, many people would stop buying gasoline while others would continue to do so. This would indicate
A) those who are buying gasoline value it at least $5 per gallon. B) those who are not buying gasoline value it more than $5 per gallon. C) only those who are extremely wealthy are buying gasoline. D) the price of gasoline needs to be regulated by the Federal Government.
Excess burden is the total burden of a tax minus the tax revenue generated by the tax.
Answer the following statement true (T) or false (F)