Which of the following is a CORRECT statement about markets for prohibited goods?
A) Penalizing sellers of an illegal good decreases supply and penalizing buyers decreases demand.
B) Penalizing either buyers or sellers of an illegal good decreases the quantity bought.
C) Taxing a good at a sufficiently high rate can achieve the same consumption level as prohibition.
D) All of the above are correct statements.
D
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Explain the CPI bias and how it can distort private contracts and increase government outlays
What will be an ideal response?
A macroeconomic equilibrium occurs when the
A) quantity of real GDP demanded is greater than the quantity of real GDP supplied. B) quantity of real GDP demanded equals the quantity of real GDP supplied and both equal potential GDP. C) quantity of real GDP demanded equals the quantity of real GDP supplied even if they are not equal to potential GDP. D) quantity of real GDP demanded is less than the quantity of real GDP supplied. E) None of the above answers is correct.