"Inflation acts as a tax because the government gains purchasing power." Is the previous statement correct or incorrect?
What will be an ideal response?
The statement is correct. Inflation decreases the purchasing power of people's money and the government essentially gains the purchasing power.
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Which of the following is NOT a mechanism the high-growth Asian economies used to share wealth across all layers of society?
A) Significant investments in rural infrastructure B) Free public education C) Tax policies that strongly redistributed income from rich to poor D) Land reform
There are two closely related crops, X and Y, with the following demand functions QX = 180 - 2PX + PY and QY = 150 + PX - PY where QX is the quantity of X, PX is the price of X, QY is the quantity of Y, and PY is the price of Y. These two crops are grown in two widely separated countries so there is no interrelationship between the supply curves. The short-run perfectly inelastic supply for X is
200 while the short-run perfectly inelastic supply for Y is 100. In equilibrium, the prices are A) PX = 30, PY = 80. B) PX = 40, PY = 60. C) PX = 60, PY = 120. D) PX = 80, PY = 130.