If government chooses a policy that does not lead to a Pareto improvement, one may say that
A) this policy creates only winners.
B) this policy creates winners and losers.
C) only poor people benefit from this policy.
D) this policy only creates losers.
B
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According to this Application, economist John Taylor believes that if the Fed had not followed "easy money" policy during the early 2000s,
A) housing starts would have declined quicker, accelerating the timing and severity of the housing bust. B) housing starts would have been much higher and the housing boom would have continued. C) housing starts would have been much lower and the housing boom and bust would have been avoided. D) housing starts would have stabilized, leading to a mild housing boom with no bust.
Underemployment occurs when: a. a firm hires fewer than the required number of workers, to save costs
b. a firm hires workers who do not possess the required skills that the job demands. c. a worker is over qualified and possesses more skills than what his job demands. d. a firm hires more than the required number of workers.