To say that government sometimes functions as a "transfer mechanism," means that government sometimes
A) ends up transferring goods to individuals in return for taxes paid.
B) ends up transferring negative externalities into positive externalities.
C) ends up taking from group X to give to group Y.
D) transfers taxes into subsidies.
E) none of the above
C
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Explain how tax revenue can be both an automatic fiscal policy and a discretionary fiscal policy
What will be an ideal response?
A rise in the interest rate
A. increases the opportunity cost of consuming today. B. decreases the opportunity cost of consuming today. C. increases the opportunity cost of consuming in the future. D. decreases the opportunity cost of consuming in the future.
If the exchange rate between the British pound and the U.S. dollar was $1 = £0.67 last month, and the exchange rate is $1 = £0.72 this month, the U.S. dollar has appreciated relative to the British pound.
Answer the following statement true (T) or false (F)
In the Ricardian model, if a country's trade is restricted, this will cause all EXCEPT which?
A) limited specialization and the division of labor B) reduced volume of trade and reduced gains from trade C) nations to produce inside their production possibilities curves D) a country to produce some of the product of its comparative disadvantage E) raised costs as more diverse product is produced internally