The term transfer payments refers to
A. Federal income taxes.
B. Additional profits transferred to monopolies as a result of their market power.
C. Payments to individuals that are not in exchange for current goods and services being produced.
D. Money that is transferred between savings and checking accounts.
Answer: C
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In a competitive industry buffeted by demand supply shocks, prices increase and decrease, but economic profits tend to revert to zero. Hence, profits are exhibiting
a. Above-average return b. Positive earnings c. Mean reversion d. None of the above
The cash price at your local elevator is $3.60/bu for corn. The relevant (nearby) futures contract for corn is the December contract and it is valued today at $3.50/bu. The "basis" for this location (market) is:
a. $0.50/bu b. -$0.50/bu c. $0.10/bu d. -$0.10/bu
If the Federal Reserve is currently paying 1 percent interest on bank reserves, but then reduces that interest rate to 0.5 percent, banks may decide to hold ________ reserves, and the money supply may ________.
A. fewer; increase B. more; decrease C. more; increase D. fewer; decrease
(Last Word) Microsoft charges a substantially lower price for a software upgrade than for the initial purchase of the software. This implies that Microsoft views the demand curve for the software upgrade to be:
A. more elastic than the demand for the original software. B. upsloping rather than downsloping. C. less elastic than the demand for the original software. D. of less value than the original software.