Welfare economics is the study of
a. taxes and subsidies.
b. how technology is best put to use in the production of goods and services.
c. government welfare programs for needy people.
d. how the allocation of resources affects economic well-being.
d
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The automatic mechanism ________ the price level in the case of ________ and ________ the price level in the case of ________
A) lowers; recession; raises; expansion B) raises; expansion; raises; recession C) raises; recession; lowers; expansion D) lowers; expansion; lowers; recession
Assume that taxes are constant. If the government borrows $17 billion in new funds and has a budget deficit of $35 billion, then the central bank has to:
a. reduce the money supply by $52 billion. b. reduce the money supply by $35 billion. c. increase the money supply by $17 billion. d. increase the money supply by $35 billion. e. increase the money supply by $18 billion.
Suppose Jack Weldon came up with a novel idea of making lamps out of recycled automobile tires. His firm, No-Skid Lamps, works three shifts a day trying to keep up with demand. Attracted by its success, other firms copy the idea and produce similar lamps. As a result, No-Skid Lamps' demand curve
a. shifts to the right and becomes more inelastic b. shifts to the right and becomes more elastic c. shifts to the left and becomes more inelastic d. shifts to the left and becomes more elastic e. stays the same
One criticism of the unemployment rate is that it
A. does not include the number of discouraged workers as unemployed. B. counts a new entrant that is actively seeking work as unemployed. C. does not include people who are not working and are not looking for work. D. is a stock measure.