Provide two specific ways in which reducing inflation might leave "permanent scars" on the economy
Reducing inflation leads to a temporary recession. However, during the recession firms will accumulate less capital and workers will lose job skills. These changes make the standard of living less than it would be otherwise.
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The net effect of savings of the asset substitution, induced retirement, and bequest effects combined is that people save ________they would have without Social Security.
A. slightly less than B. the same as C. more than
Which of the following statements is false?
A. One of the basic principles capitalism is based on is to "trust no one." B. To have real competition in a market economy no one business should be able to have any influence over price. C. A basic trade-off exists between the goals of equity and efficiency for a society. D. The forces of supply and demand will NOT automatically lead to an equitable distribution of income.
Taxes on alcohol and tobacco are often referred to as “______ taxes.”
a. flat b. vertical c. sin d. progressive
Given the following information, aggregate income equals:Profits$700Rent$400Compensation to employees$2,500Interest$300Taxes$1,000Transfer payments$500
A. $3,400. B. $3,900. C. $2,900. D. $4,400.