Measures Taken to Reduce Inequality Are Likely to Cause Economic

question 6

Multiple Choice

Measures taken to reduce inequality are likely to cause economic efficiency to

• A) increase indefinitely at an increasing rate.
• B) increase steadily.
• C) increase significantly at first and then level off.
• D) fall.
• E) remain unchanged.

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Definitions:

Market Price

The current exchange price for an asset or service in the marketplace.

Discount Rate

The interest rate used to determine the present value of future cash flows or to discount future obligations.

Maturity

The predetermined date on which a financial instrument, loan, or security reaches its final payment, at which point the principal amount must be repaid.

Zero-Coupon Bond

A debt security that doesn't pay periodic interest, sold at a discount from its face value, and repays the face value at maturity.