In an IS-LM model with an upward-sloping LM curve and a downward-sloping IS, how does the expenditure multiplier compare to [1/(1-b)]?
A) It is equal to it.
B) It is greater.
C) It is smaller.
D) Cannot be answered with the information given.
A
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Taxing some citizens to provide welfare grants to other citizens has been called by some "coercive charity." The economist's case for "coercive charity" assumes
A) it is efficient to transfer a dollar from a wealthy person to someone with little income. B) morality cannot be legislated. C) people are basically selfish. D) people who genuinely want the poor to be helped often do not provide any help. E) redistributing income promotes more rapid economic growth.
The above figure shows the market for rice in Japan. SDomestic represents the domestic supply curve, and Sworld represents the world supply curve. A $1 per unit tariff has the same effect on producer and consumer surplus as a quota of
A) 25 units. B) 30 units. C) 35 units. D) 65 units.