Scenario 4-1 In a Given Year, Country a Exported $12 Million Worth

question 3

Multiple Choice

Scenario 4-1
In a given year, country A exported $12 million worth of goods to country B and $6 million worth of goods to country C; country B exported $4 million worth of goods to country A and $7 million worth of goods to country C; and country C exported $5 million worth of goods to country A and $2 million worth of goods to country B.
-Which of the following statements about transfer payments is true?

• A)Transfer payments are not included in total government expenditures.
• B)Transfer payments involve the international remittance of funds.
• C)Transfer payments refer to the transfer of money by the commercial banks to the people.
• D)Transfer payments are made by the government to taxpayers.
• E)Transfer payments are made when governments purchase goods and services.

---

Definitions:

Willingness to Pay

The highest price a consumer is prepared to pay for a good or a service.

Rule of Reason

A legal doctrine used in antitrust law that evaluates the restrictive practices of a business by considering the purpose of the practice and its effect on competition.

Sherman Act

A landmark federal statute in the field of United States antitrust law passed in 1890 to outlaw monopolistic business practices.

Demand Elasticity

An indicator that reflects the degree of change in demand for a good due to price adjustments.