What are the basic lessons learned about the redistributive effects of price changes?
What will be an ideal response?
1) not all prices rise at the same rate during an inflation
2) not everyone suffers equally from inflation
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One possible way of achieving faster economic growth is to
A) abolish the system of patents and copyrights so that everyone can use people's ideas. B) limit international trade to only a few countries so that the nation is not hurt by too much trade. C) encourage research and development. D) limit schooling in order to have more people in the labor force, producing goods and services. E) promote tax saving so that people spend more and businesses' profits are larger.
The above figure shows the market for anti-freeze. The government imposes the sales tax shown in the figure on sellers. What is the amount of the tax?
A) $1 per gallon B) $2 per gallon C) $3 per gallon D) $4 per gallon
Refer to Figure 13-11. What is the allocatively efficient output for the firm represented in the diagram?
A) Q1 units B) Q2 units C) Q3 units D) Q4 units
When the Federal Reserve sells a government security to a bond dealer, which transmits payment from a transactions deposit account at a bank
A) the cash of the Federal Reserve will decrease. B) the net worth of the commercial bank will decrease. C) the loans of the commercial bank will increase. D) the money supply will decrease.