How do legal controls on prices lead to corruption?
a. Persons who benefit from the controls are willing to bribe officials to keep the controls in place.
b. Persons who make the laws may favor certain groups at the expense of others.
c. Selling in the black market is very profitable, and persons therefore willingly break the law.
d. Discrimination may occur as a means to limit buying or selling select groups.
e. All of the above are correct.
e
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According to the traditional Keynesian approach, if the government increases spending by $5 million and raises current taxes by $5 million at the same time, then
A) real GDP will increase by $5 million. B) real GDP will decrease by $5 million. C) real GDP will decrease by more than $5 million. D) real GDP will remain the same.
If a demand shock causes the economy to move to a real GDP level that is below its full employment level, then
a. we refer to this as a positive demand shock. b. the economy will remain at this point in the long run. c. the AS curve will adjust in the long run until the economy returns to full employment. d. the AD curve will move back to its original position in the long run. e. the unemployment rate will decline.