Payments to households that do not require anything in exchange are called
A) transfer payments.
B) government purchases.
C) consumption expenditures.
D) investment expenditures.
Ans: A) transfer payments.
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The selling of a product for a price below its cost of production is called
A) operating at a loss. B) unfair competition. C) fair competition. D) dumping.
The consumption function shifts upward when
A) real income increases. B) saving increases. C) the real wealth of the average household increases. D) population decreases.
Which of the following is an argument against free trade?
A) protecting infant industries B) protecting against dumping C) protecting domestic jobs D) all of the above
A large factory pours its toxic wastewater into a nearby river, and as a result, the residents of a downstream community experience high rates of illness and birth defects. The economic problem illustrated by this example is
A. marginal thinking. B. comparative advantage. C. repealing the laws of supply and demand. D. externalities. E. productivity growth.