Author Question: Suppose the government wants to reduce the illegal importation of exotic animals used as pets and ... (Read 109 times)

plus1 · **on:** Jun 29, 2018

Suppose the government wants to reduce the illegal importation of exotic animals used as pets and tries to achieve this goal by interrupting the supply of illegally imported exotic animals.

If the demand for these animals is highly elastic, this government effort will result in A) a small reduction in the quantity of exotic pets demanded.
B) a large reduction in the quantity of exotic pets demanded.
C) no change in the quantity of exotic pets demanded.
D) an increase in the quantity of exotic pets demanded.

Question 2

Inflation targeting requires that the central bank

A) publicize its targeted inflation rate.
B) avoid changing the amount of the monetary base.
C) use a short-term interest rate as its policy instrument.
D) set a fixed price real assets.
E) adopt a k-percent rule for the inflation rate.

The figure above shows the market for reserves.