Which of the following is true?
a. There is a fixed size of economic pie available for the government to allocate among individuals.
b. In a market economy, the link between productivity and income provides individuals with an incentive to provide resources that are highly valued by others.
c. Taxes and transfers do not affect the amount of income that is created.
d. How income is distributed exerts little impact on the total amount of income generated.
B
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If a U.S. firm buys tulips from a Dutch firm and the Dutch firm uses the dollars it gets to buy U.S. stocks, the U.S. trade balance ________ and the U.S. financial account ________
A) rises; rises B) rises; falls C) falls; falls D) falls; rises
The speculative motive for holding money is closely tied to what function of money?
A) store of wealth B) unit of account C) medium of exchange D) standard of deferred payment
The following is an example of risk aversion
a. those applying for a well-paid job tend to be the most qualified b. more reckless drivers opt for cars with fewer safety devices c. the contractor with the lowest bid for a is under-qualified d. Initial Public Offerings (IPOs) seek investors when prospects look good
More than one-third of the unemployed are recent entrants into the labor force
a. True b. False Indicate whether the statement is true or false