One reason why critics argue that large firms should not be broken up is that in some cases
a. large firms have a concentration of economic power.
b. large firms are less-efficient producers.
c. many smaller firms would be less-efficient producers.
d. there is no economic reason to break up large firms that may have some control over the market.
c
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A policy maker who is concerned with the rate of inflation may not choose to reduce it because ________.
A. the government can only affect unemployment, not the rate of inflation B. reducing the rate of inflation means that the unemployment rate will increase C. reducing the rate of inflation means reducing taxes D. reducing the rate of inflation requires an increase in government spending
If the Fed raises the interest rate, in the foreign exchange market the demand for the U.S. dollar increases
Indicate whether the statement is true or false
In general, the optimal taxation literature finds that a society can maximize social welfare through income redistribution
a. True b. False
Which of the following is the marginal tax rate?
A. The fraction of each additional dollar of income that must be paid in taxes. B. The total tax paid divided by total income. C. The tax rate paid by the average taxpayer.