Refer to the figure above. Which of the following statements are true in this case?
A) P1 is the socially optimal price for Good X.
B) P2 is the price of Good X in a free market.
C) Q2 is the efficient level of output of Good X.
D) Q2 is the quantity supplied of Good X in a free market.
C
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The main difference between GNP and GDP is:
a. GDP measures a nation's income, and GNP measures a nation's output. b. Largely in the minds of the public, because economically, there is no difference. c. GDP measures the income earned from the production of all final goods and services within a nation's borders; GNP measures the income earned by domestically-owned resources from producing final goods and services anywhere in the world. d. GDP measures a nation's output, and GNP measures a nation's income.
Kim is paid $50,000 per year, and pays an annual income tax of 10 percent. Due to an inflation rate of 10 percent, her pay increases to $55,000, which puts her in a higher tax bracket where she must pay 20 percent. Which of the following can be said of Kim?
A. Inflation caused her to be taxed more heavily and decreased her purchasing power. B. Inflation caused her to be taxed more heavily and increased her purchasing power. C. Her raise reflects the inflation rate, and therefore her purchasing power is unchanged. D. Inflation caused her to be taxed more but didn’t change her purchasing power.