Economists consider the effects of free trade on income distribution to be ________ important than the effects on overall welfare because ________
A) less; those who are harmed can be compensated by those who gain
B) more; those who are harmed are not compensated by those who gain
C) less; the effects on income distribution are minor and inconsequential
D) more; the effects on income distribution are major and consequential
E) less; the wealthy benefit and only the poor lose
A
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In the circular flow model, consumption goods are bought and sold in the
A) goods markets. B) financial market. C) factor markets. D) government market. E) monetary flows.
Although the pegged exchange rate between the yuan and the dollar has undervalued the yuan, China had been reluctant to abandon the peg for fear that abandoning the peg would
A) increase Chinese holdings of dollars. B) reduce exports and reduce economic growth. C) reduce capital inflows. D) increase exports and increase the current account deficit.
According to Chandler (1977), the major event in business development in 1895–1904 was
(a) the Granger cases. (b) Munn v Illinois (1877). (c) the rise of vertically integrated firms. (d) the merger wave.
Perfect competition differs from monopolistic competition primarily because
A. in monopolistic competition, there are many firms in the industry. B. in perfect competition, firms have homogeneous products. C. in monopolistic competition, entry into the industry is limited. D. in perfect competition, price is a decision variable.