Price ceilings and minimum wages may increase poverty in the long run because they tend to
a. decrease the incentive to work among the poor
b. increase the level of saving among the rich
c. increase productivity of labor among the rich and poor
d. promote investment among the rich
e. reduce the distortions in the price system
A
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Which of the following best characterizes the circular flow of income?
a. Households buy goods and services from businesses, and businesses sell goods and services to households. b. The government purchases resources from businesses and households and then sells goods and services to businesses and households. c. Businesses buy resources from the government, and households buy goods and services from businesses. d. Businesses buy resources from households, and households use their income to buy goods and services from businesses.
Contractionary fiscal policy:
What will be an ideal response?
The smaller the MPS, the larger the multiplier.
Answer the following statement true (T) or false (F)
The so-called Euro Zone refers to:
A. All members of the European Union B. The EU nations that have adopted a common currency C. The combined Eastern and Western Europe D. Nations in Europe where the U.S. has military bases