A tax that imposes a small excess burden relative to the tax revenue that it raises is
A) an efficient tax. B) a payroll tax. C) a sin tax. D) a FICA tax.
A
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When the economy suffers a permanent negative supply shock and the central bank responds by changing the autonomous component of monetary policy to keep inflation at the target inflation rate, then
A) aggregate demand curve shifts leftward. B) aggregate demand curve shifts rightward. C) output will be unchanged. D) both A and C.
When the real wage is below the equilibrium price in the labor market ________
A) we have an excess supply of labor and the real wage should fall B) we have an excess demand of labor and the real wage should fall C) we have an excess demand of labor and the real wage should increase D) we have an excess supply of labor and the real wage should increase E) none of the above