The main international repercussion of either a fiscal expansion or monetary contraction is to
a. raise interest rates and the exchange rate, thereby crowding out net exports.
b. raise interest rates and lower the exchange rate, thereby crowding in net exports.
c. lower interest rates and the exchange rate, thereby crowding in net exports.
d. lower interest rates and raise the exchange rate, thereby crowding out net exports.
a
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A perfectly competitive firm has no influence over price because: a. its output is insignificant relative to the market as a whole. b. antitrust laws constrain perfectly competitive firms
c. consumers establish the prices of products. d. it is unaware of the demand curve it faces.
The government imposes a unit excise tax on bubble gum. What happens as a result?
A) The equilibrium quantity of bubble gum increases. B) At the original market price, there will be a bubble gum surplus so price decreases. C) At the original market price, there is a bubble gum shortage and so price rises. D) There will be no change in either the market price or equilibrium quantity as long as the excise tax rate is 5 percent or less.