An unexpected increase in inventories has a negative effect on future production.
Answer the following statement true (T) or false (F)
True
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The tax wedge is the difference between the
A) amount of taxes needed to pay off the national debt and the actual amount of taxes. B) nominal and real interest rates. C) pretax and posttax returns to an economic activity. D) amount of taxes needed to balance the federal budget and the actual amount of taxes.
While taxing inelastic goods minimizes social costs from taxation, it frequently conflicts with traditional notions of fairness
a. True b. False
A strategy A is "dominant" for a player X if
A) strategy A contains among its outcomes the highest possible payoff in the game. B) irrespective of any of the possible strategies chosen by the other players, strategy A generates a higher payoff than any other strategy available to player X. C) strategy A is the best response to every strategy of the other player. D) strategy A is the best response to the best strategy of the other player. E) every outcome under strategy A generates positive payoffs.
Production inefficiency occurs
A. only when an economy produces underneath its production possibility frontier. B. either when an economy produces underneath the production possibility frontier or when the economy is producing the wrong combination of goods on the production possibility frontier. C. only when an economy produces at the wrong point on the production possibility frontier. D. only when the economy produces outside the production possibility frontier.