Redistributing income from the rich to the poor creates inefficiency because
A) of wasteful expenditures by people receiving welfare grants.
B) of the administrative costs to operate the government redistribution agencies.
C) the redistribution creates an incentive to produce less output.
D) Both answers B and C are correct.
E) Both answers A and C are correct.
D
You might also like to view...
In the game in Scenario 13.11, equilibrium is
A) R1, C1. B) R1, C2. C) R2, C1. D) R2, C2. E) a mixed strategy based on all four pure strategies.
If a bank sells a $1,000 security to the Fed and the required reserve ratio is 20 percent: a. the bank has $1,000 in additional excess reserves, of which it can lend $800. b. the bank has $1,000 in additional excess reserves, all of which it can lend out. c. the bank has lost an asset and must reduce its loans
d. the bank has lost a liability. e. there is no change in excess reserves, since net assets do not change.
At the equilibrium price, the quantity of the good that buyers are willing and able to buy
a. is greater than the quantity that sellers are willing and able to sell. b. exactly equals the quantity that sellers are willing and able to sell. c. is less than the quantity that sellers are willing and able to sell. d. there is no scarcity.
Suppose a Starbucks tall latte costs $4.00 in the United States, 5.00 euros in the euro area and $2.50 Australian dollars in Australia. Nominal exchange rates are .80 euros per dollar and 1.4 Australian dollars per U.S. dollar. Where does purchasing-power parity hold?
a. both the euro area and Australia b. the euro area but not Australia c. Australia but not the euro area d. neither the euro area or Australia