If the government wants to raise tax revenue and shift most of the tax burden to the consumers, it would impose a tax on a good with a:
a. flat (elastic) demand curve and a steep (inelastic) supply curve.
b. steep (inelastic) demand curve and a flat (elastic) supply curve.
c. steep (inelastic) demand curve and steep (inelastic) demand curve.
d. flat (elastic) demand curve and a flat (elastic) supply curve.
b
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If opportunity costs are constant, the production possibilities frontier would be graphed as
A) a negatively sloped straight line. B) a ray from the origin. C) a positively sloped straight line. D) a negatively sloped curve bowed in toward the origin.
An overvalued fixed exchange rate can be maintained only as long as:
A) the country's central bank reserves are available to support currency intervention in the foreign exchange market. B) the country's central bank can increase the domestic money supply. C) the country's government increases debt financing. D) none of the above.