What is the relationship between food stamps and cash transfer payments? When, if ever, are they equivalent? When, if ever, might they diverge?
What will be an ideal response?
Food stamps are equivalent to cash transfer payments in situations where recipients would have spent that much on food anyway had they been given cash. Food stamps are no longer equivalent to cash transfer payments for those individuals who receive more food stamps then they need to meet their food budget. In those situations, individuals are worse off because they would rather have cash to spend on all other goods.
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In a free market economy, the decisions of buyers and sellers are:
A. coordinated by the government. B. random. C. motivated by custom and tradition. D. guided by prices.
Which of the currencies below does not serve a role as an international reserve currency?
A) European euro B) Japanese yen C) U.S. dollar D) Mexican peso
If the nominal interest rate is 0.6 percent and the rate of inflation is 2.9 percent in a given year, then what is the corresponding real rate of return?
A) 3.5 percent B) 2.3 percent C) -3.5 percent D) None of the above.
Which of the following examples best illustrates the concept of derived demand?
A) An increase in the price of beef results in an increase in the demand for fish. B) The higher the demand for automobiles, the greater the demand for steel. C) The demand for Pepsi varies directly with the price of Coke. D) The demand for a good varies inversely with its price.