How do income redistribution programs affect equality and efficiency?
Programs intended to improve equality by redistributing income from the richer to the poorer may reduce efficiency in several ways. They may discourage the recipients from working to enhance their own incomes, and they may simultaneously discourage the richer people from working, since their after-tax incomes will be reduced.
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Refer to Table 12.1. Assuming the inflation rate forecast to be accurate, which nation has the lowest real rate of return?
A) Japan B) Australia C) the United States D) South Africa
Suppose the economy has a recessionary gap. By using an expansionary monetary policy, the Fed can
A) raise real GDP without increasing the price level. B) raise real GDP and the price level. C) raise real GDP and decrease the price level. D) raise the price level alone, but cannot increase real GDP.
If a hot dog manufacturer acquires a bakery that primarily bakes hot dog buns, you would likely see
a. Higher prices for the hot dogs but lower prices for the buns b. Higher prices for the buns but lower prices for the hot dogs c. Higher prices for both the hot dogs and the buns d. Lower prices for both the hot dogs and the buns
Which of the following is consistent with the ideas underlying the rule of reason legal doctrine, that was established by the U.S. Supreme Court (in the case of U.S. Steel in 1920)?
a. Mere size is not an antitrust offense, because some firms may acquire a large size and monopoly position by being particularly efficient at delivering high-quality products at low prices. b. In addition to a monopoly market structure, the crime of monopolization requires evidence of foreign government involvement. c. The actions of monopoly market structures are legal, even if the firms in the market manage to earn unreasonable profits. d. Every contract or combination in restraint of trade is illegal.