Household income comes from three main sources: wages and salaries, property, and government.
Answer the following statement true (T) or false (F)
True
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Which of the following correctly explains the role of economic agents in a free market?
A) Economic agents set production quotas for sellers in the market. B) Economic agents set prices according to the production cost of each good. C) Economic agents allocate goods to those buyers who need the goods the most. D) Economic agents allocate goods to those buyers who value the goods the most.
Historical evidence shows that the relationship between interest rates and investment is
A) indeterminable. B) positive. C) negative. D) None of the above.
Firms discount future profits at the interest rate r because
A) it is the interest rate on their debt. B) it is the same rate as for households. C) Ricardian equivalence holds. D) it has to equal the marginal productivity of capital in equilibrium.
Sam hires an attorney to present a court case. If Sam wins the case, he will receive some money. This payoff is a function of the attorney's hours and which judge is assigned the case that day
Judge A is very understanding toward people in Sam's position, but judge B is very harsh toward people like Sam. Is it possible for Sam to get the attorney to deliver the optimal amount of effort and make the attorney bear all of the risk?