Because fluctuations in the world oil price make the U.S. short-run macroeconomic equilibrium fluctuate, someone suggests that the government should vary the tax rate on oil, lowering the tax when the world oil price rises and increasing the tax when the world oil price falls, to stabilize the oil price in the U.S. market. If this suggestion is implemented, when the world price of oil ______, aggregate supply would ______. A. changes; not change B. falls; increase C. rises; decrease D. falls; decrease E. rises; increase
Because fluctuations in the world oil price make the U.S. short-run macroeconomic equilibrium fluctuate, someone suggests that the government should vary the tax rate on oil, lowering the tax when the world oil price rises and increasing the tax when the world oil price falls, to stabilize the oil price in the U.S. market. If this suggestion is implemented, when the world price of oil ______, aggregate supply would ______. A. changes; not change B. falls; increase C. rises; decrease D. falls; decrease E. rises; increase
Macroeconomics: Private and Public Choice (MindTap Course List)
16th Edition
ISBN:9781305506756
Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Chapter10: Dynamic Change, Economic Fluctuations, And The Ad-as Model
Section: Chapter Questions
Problem 10CQ
Related questions
Question
Because fluctuations in the world oil
If this suggestion is implemented, when the world price of oil ______,
A.
changes; not change
B.
falls; increase
C.
rises; decrease
D.
falls; decrease
E.
rises; increase
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