A government's policy of redistributing income makes the income distribution
a. more equal, distorts incentives, alters behavior, and makes the allocation of resources more efficient.
b. more equal, distorts incentives, alters behavior, and makes the allocation of resources less efficient.
c. less equal, distorts incentives, alters behavior, and makes the allocation of resources more efficient.
d. less equal, distorts incentives, alters behavior, and makes the allocation of resources less efficient.
b
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While many developing countries have reformed their economies in order to imitate the success of the successful industrial economies, the process remains incomplete and most developing countries tend to be characterized by all of the following EXCEPT
A) seigniorage. B) control of capital movements by limiting foreign exchange transactions connected with trade in assets. C) use of natural resources or agricultural commodities as an important share of exports. D) a worse job of directing savings toward their most efficient investment uses. E) reduced corruption and poverty due to limited underground markets.
The price-taker firm should discontinue production immediately if:
A. the market price exceeds the firm's average total costs. B. the market price is less than the firm's average variable costs. C. the market price is less than the firm's average total costs, but greater than its average variable cost. D. its accounting statement indicates that it is suffering losses.
Which of the following is considered a legitimate concern of a large public debt?
A. Bankruptcy of the federal government. B. Crowding-out of private investment. C. Burdening future generations. D. Collapse of the financial system.
Refer to Table 2-5. Finland has a comparative advantage in the production of
A) lumber. B) neither product. C) cell phones. D) both products.