Unanticipated increase in inflation transfers wealth from the borrower, who pays the pre-decided rate of interest to the lender
Indicate whether the statement is true or false
F
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If production of a good creates external benefits, a competitive market will likely produce
a. less output than would maximize profit. b. more output than would maximize profit. c. less output than is efficient. d. more output than is efficient.
One key assumption behind the policy irrelevance proposition is that
A. prices are "sticky" upward. B. markets are not purely competitive. C. wages are "sticky" downward. D. the rational expectations hypothesis holds.
If the marginal tax rate exceeds the average tax rate, the tax would be
A. proportional. B. regressive. C. progressive. D. uniform.
Refer to the information provided in Figure 13.9 below to answer the question(s) that follow. 
Figure 13.9 Refer to Figure 13.9. If competition is introduced into the market, the net social gain may be greater than the area BEC to the extent that
A. society may value the increase in consumer welfare on equity as well as efficiency grounds. B. the firm may have engaged in rent-seeking behavior, the cost of which would also be avoided. C. firms facing competition may have a greater incentive to cut costs and innovate, which results in gains to society. D. All of the above are correct.