Which of the following is an example of a transfer payment?
a. wages paid to military personnel
b. benefits paid to Social Security recipients
c. purchase of aircraft by the Department of Defense
d. payments made to a contractor for construction of a highway
Answer: b. benefits paid to Social Security recipients
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Starting from long-run equilibrium, a large increase in government purchases will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. expansionary; higher; potential B. recessionary; higher; potential C. recessionary; lower; lower D. expansionary; higher; higher
Corporate managers and shareholders do not always have the same goals
Indicate whether the statement is true or false
Without free trade, the domestic price of a good must be equal to the world price of a good
a. True b. False Indicate whether the statement is true or false
A tall latte in China costs 30 yuan. The same latte in the U.S. costs 4 dollars. If the exchange rate is 6.5 yuan per dollar then, the real exchange rate is
a. .867 so the good is more expensive in the U.S. b. .867 so the good is more expensive in China. c. 1.154 so the god is more expensive in the U.S. d. 1.154 so the good is more expensive in China.