Which of the following statements is correct?
A. The price support program hastened the exodus of resources from agriculture.
B. The main beneficiaries of government price support assistance were the very low-income
farmers.
C. If the demand for agricultural products is inelastic, a relatively small decrease in supply will
increase gross farm incomes.
D. There is a misallocation of resources in rural America because of absolute and relative
increases in the size of the farm population.
Answer: C
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Consider two people, Sandy Ross, who earns $25,000 . and Gary Belcher, who earns $50,000 . If the flat-tax rate is 20 percent, then:
a. the government collects a total of $20,000. b. Gary pays twice the tax amount Sandy pays. c. Gary pays three times the tax amount Sandy pays. d. Gary and Sandy pay exactly the same tax amount. e. Gary pays $15,000 in taxes.
If the number of dollars needed to buy a representative basket of goods falls, the price level
a. falls, so the value of money falls. b. falls, so the value of money rises. c. rises, so the value of money falls. d. rises, so the value of money rises.