________ states that if previously existing distortions exist, a distortionary tax may actually improve efficiency.
A. The principle of second best
B. The principle of neutrality
C. The rule of reverse distortion
D. The benefits-received principle
Answer: A
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A cartel is a collusive agreement among a number of firms that is designed to
A) expand output and lower prices but not to a predatory level. B) restrict output and lower prices to a predatory level. C) restrict output and raise prices. D) expand output and raise prices. E) expand output and lower prices to a predatory level.
According to the AS/AD model, a reduction in the money supply is appropriate:
A. when saving equals investment. B. when saving is greater than investment. C. whatever the level of saving and investment. D. when saving is less than investment.
Which of the following is likely to have the most inelastic price elasticity of demand?
A. Automobiles. B. Pickup trucks. C. The Hondas one Honda dealer sells. D. Hondas.
The latent poor are not included in the official poverty count as poor
Indicate whether the statement is true or false