What assumptions lead to the conclusion that final products are distributed efficiently among households?
What will be an ideal response?
People have different tastes and preferences, and they buy very different things in very different combinations. As long as everyone shops freely in the same markets, no redistribution of outputs among people will make them better off. Therefore the distribution of goods among households is efficient.
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In a market, competitive forces guarantee that any price other than the equilibrium price is:
a. market-clearing. b. stable c. temporary. d. unaffordable.
For much of the history of aid, ____________ has been a driving force in decisions about how much to give in foreign aid.
A. the finance gap of receiving countries B. the opportunity cost of investing in developing nations C. the interest rate in the home country D. political strategy