Which of the following involves taking income from those with higher incomes and providing income to those with lower incomes?
a. Appropriation
b. Labor-leisure tradeoff
c. Economic stabilization
d. Redistribution
d. Redistribution
Redistribution means taking income from those with higher incomes and providing income to those with lower incomes.
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Suppose the daily demand for Coke and Pepsi in a small city are given by QC = 90 - 100PC + 400(PP - PC) and QP = 90 - 100PP + 400(PC - PP), where QC and QP are the number of cans Coke and Pepsi sell, respectively, in thousands per day. PC and PP are the prices of a can of Coke and Pepsi, respectively, measured in dollars. The marginal cost is $0.45 per can for both Coke and Pepsi. What is Coke's best response function?
A. QC = 200PP - 67.5 B. QC = (90 + 400PP) - 500PC C. PC = 0.315 + 0.4PP D. PC = (0.18 + 0.8PP) - 0.002QC
According to the Lucas critique, if past increases in the short-term interest rate have always been temporary, then
A) the term-structure relationship using past data will then show only a weak effect of changes in the short-term interest rate on the long-term rate. B) the term-structure relationship using past data will show no effect of changes in the short-term interest rate on the long-term rate. C) one cannot predict the term-structure relationship as it depends on expectations. D) the term-structure relationship using past data will nevertheless show a strong effect of changes in the short-term interest rate on the long-term rate because of a change in the way expectations are formed.
International capital flows tend to reduce the impact of monetary policy
a. True b. False Indicate whether the statement is true or false
If home prices rise far above the value of the homeowner's mortgage loan,
A. homeowners will be tempted to default on their mortgage loans. B. default risk faced by lenders tends to decrease. C. homeowners will have greater difficulty obtaining a home equity line of credit. D. default risk faced by lenders tends to increase.