What is the difference between economic efficiency and equity?
What will be an ideal response?
Economic efficiency is concerned with maximizing the value of output that can be generated by a given resource base while equity deals with the distribution of society's total output among the sectors and individuals of society.
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How do we tell whether a budget deficit needs discretionary action to remove it?
What will be an ideal response?
For this question, assume that investment spending depends only on output and no longer depends on the interest rate. Given this information, an increase in the money supply
A) will cause investment to decrease. B) will cause investment to increase. C) will cause a reduction in the interest rate. D) will have no effect on output or the interest rate. E) will cause an increase in output and have no effect on the interest rate.