Income is a poor measure of relative position when attempting to determine horizontal equity.
A. True
B. False
C. Uncertain
A. True
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A tariff on a product
a. is a direct quantitative restriction on the amount of a good that can be imported. b. increases the domestic quantity supplied. c. increases domestic consumer surplus. d. All of the above are correct.
If national saving in a closed economy is greater than zero, which of the following must be true?
a. Either public saving or private saving must be greater than zero. b. Investment is positive. c. d. All of the above are correct.
When the difference between potential GDP and actual GDP increases, the nation usually suffers from increased inflation.
Answer the following statement true (T) or false (F)
Using Figure 4.2, suppose point C represents the optimal mix of public and private goods for a society. The market mechanism is likely to result in a mix of output represented by point
A. C because the market mechanism is efficient. B. B because the market mechanism tends to overproduce public goods. C. F because the market mechanism is inefficient. D. D because the market mechanism tends to underproduce public goods.