The government proposes a tax on red roses in order to boost their tax revenue. Consumers will bear no part of the tax burden if the:
a. demand for roses is perfectly inelastic.
b. supply of roses is perfectly elastic
c. demand for roses is perfectly elastic.
d. demand for roses is unit elastic.
c
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According to the model of aggregate supply and aggregate demand, in the long run, an increase in the money supply should cause
A. prices to rise and output to remain unchanged. B. prices to fall and output to fall. C. prices to rise and output to rise. D. prices to fall and output to remain unchanged.
Refer to Table 19-24. Suppose that a very simple economy produces three goods: pizzas, haircuts, and backpacks. Suppose the quantities produced and their corresponding prices for 2011 and 2016 are shown in the table above
Use the information to compute real GDP in the year 2011 and 2016. Calculate real GDP in 2016 assuming the base year is 2011. Do the same calculation assuming the base year is 2016. Are the calculations different? Why?