Transfer payments:
A. involve programs such as Social Security and welfare.
B. do not show up in GDP.
C. are payments from government accounts to individuals for programs that do not involve a purchase of goods or services.
D. All of these are true.
Answer: D
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Assume that a multinational company produces components in country A and ships them to a subsidiary in country B. In order to increase its profits
A) the company should charge a high transfer price for the components if income taxes in country B are higher than in country A. B) the company should charge a low transfer price for the components if income taxes in country B are higher than in country A. C) the company should charge a high transfer price for the components if income taxes in country A are higher than in country B. D) None of the above
Which of the following describes a natural monopoly?
a. When economies of scale are large relative to size of market b. Created by the government through patents, copyrights c. When one firm has control of a physical resource d. When one firm pursues predatory pricing
How would an increase in cigarette taxes succeed according to the following criteria: collecting a large amount of tax revenue; distorting demand as little as possible; discouraging consumption of harmful commodities?
The CPI was 238 in one year and 244 the following year. How much did prices rise between these two years?
A) 2.46 percent B) 5.50 percent C) 2.52 percent D) 0.03 percent