Mention some of the problems incurred by black markets
What will be an ideal response?
Some of the problems that black markets incur are as below:
1. When they involve goods and services that have been legally banned, the black market undermines the ban.
2. When black market transactions occur in markets for legal goods and services in order to avoid taxes or regulations, they put legitimate businesses at a disadvantage.
3. To compensate for the lost revenue, governments must levy higher taxes.
4. Criminals spend vast resources trying to elude the law, which is not an effective use of society's resources.
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If the wage rate is fixed at a certain level, the:
a. total wage cost curve is horizontal. b. total wage cost curve is a straight upward sloping line. c. MP must be constant. d. total wage cost curve will increase at an increasing rate. e. total wage cost curve will increase at a decreasing rate.
The interest rate that banks charge each other for short-term loans is the
a. discount rate b. prime rate c. treasury rate d. federal funds rate e. interbank rate