Under what conditions might government intervention in a market economy improve the economy's performance?
If there is a market failure, such as an externality or monopoly, government regulation might improve the well-being of society by promoting efficiency. If the distribution of income or wealth is considered to be unfair by society, government intervention might achieve a more equal distribution of economic well-being.
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Refer to the scenario above. If the first household pays 20% of its income as tax,
the second household pays 17.5% of its income as tax, the third household pays 13% of its income as tax, and the fourth household pays 10% of its income as tax, income taxes are ________ in nature. A) progressive B) regressive C) cardinal D) ordinal
As the market wage increases:
a. the income effect normally influences you to work more. b. the income effect normally influences you to work less. c. the substitution effect normally influences you to work less. d. the substitution effect normally influences you to involve in nonmarket work.
When wages are set by contract, inflation
a. reduces real wages; this likely makes labor markets more flexible. b. reduces real wages; this likely makes labor markets less flexible. c. raises real wages; this likely makes labor markets more flexible. d. raises real wages; this likely makes labor markets less flexible.
Which of the following is not assumed to be constant along a money demand curve?
What will be an ideal response?