Critics of supply-side economics argue that
A. tax cuts do not affect supply, only demand.
B. supply-siders exaggerate the effects of tax cuts.
C. incentives have no effect on behavior.
D. the goals of supply-siders are not supported by most economists.
Answer: B
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If policymakers use a pollution tax to control pollution, the tax per unit of pollution should be set
A) equal to the marginal private cost of production at the economically efficient level of pollution. B) equal to the amount of the deadweight loss created in the absence of a pollution tax. C) at a level low enough so that producers can pass along a portion of the additional cost onto consumers without significantly reducing demand for the product. D) equal to the marginal external cost at the economically efficient level of pollution.
When considering the velocity of money, the Federal Reserve is most concerned about its
A) stability. B) absolute size. C) determinants. D) sign.