Monetarists believe that:
A. prices and wages are inflexible or sticky.
B. both product and resource markets are monopolistic.
C. velocity is relatively stable.
D. the economy is more stable when active fiscal and monetary policy are used.
C. velocity is relatively stable.
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When young students are hungry, they can be disruptive and inattentive in class. Thus, providing lunch to students has external benefits. The figure above represents the market for school lunches before and after government vouchers are issued
a. What is the unregulated private market equilibrium? b. What is the efficient quantity of lunches? c. What is the amount of the voucher necessary to move the economy to the efficient number of lunches? d. When vouchers are used, what is the dollar price of the lunch that suppliers receive and what is the dollar price that consumers pay when the voucher is used?
What factors could explain why wage inequality in the United States has been increasing over the last several decades?
What will be an ideal response?