Transfer payments are paid mainly to
A. individuals.
B. business firms.
C. foreign countries.
D. government bondholders.
A. individuals.
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A commitment problem exists when people cannot achieve their goals because:
A. the payoff matrix is unknown. B. they cannot make credible threats or promises. C. they cannot play their dominant strategy. D. they do not have the first-mover advantage in a sequential move game.
If the supply of coffee falls due to bad weather conditions in coffee-exporting countries, then the
a. price and quantity will rise b. price and quantity will fall c. price will fall and quantity will rise d. price will rise and quantity will fall e. quantity will fall, but price may rise or fall
Suppose that the income elasticity of demand for good X is positive but less than 1. Other things being equal, which of the following statements is INCORRECT?
A. Good X is a normal good. B. The quantity demanded of good X decreases as a consumer's income declines. C. A consumer buys more X as income rises, but the share of income spent on good X falls. D. A consumer buys more X as income rises and the share of income spent on good X also rises.
Refer to the graph shown. In a perfectly competitive industry, price would:
A. equal $16. B. equal $12. C. be greater than $16. D. be less than $12.