Assume the United States can use a given amount of its resources to produce either 20 airplanes or 8 automobiles and Japan can employ the same amount of its resources to produce either 20 airplanes or 10 automobiles. The U.S. should specialize in

Redistributing income from the rich to the poor creates inefficiency because

A) of wasteful expenditures by people receiving welfare grants. B) of the administrative costs to operate the government redistribution agencies. C) the redistribution creates an incentive to produce less output. D) Both answers B and C are correct. E) Both answers A and C are correct.

Other things equal, if the central bank raises the target inflation rate, this would result in the

A) AD curve shifting temporarily to the right. B) AD curve shifting permanently to the right. C) AS curve shifting temporarily to the left. D) AS curve shifting permanently to the left.