Economic Thinking Suggests That a Nation in Which Middlemen Are

question 120

Multiple Choice

Economic thinking suggests that a nation in which middlemen are considered to be unproductive seekers of profit, and where their activities are heavily restricted by law, will

• A) gain by channeling people's efforts away from unproductive middleman activity toward physical output.
• B) lose the potential gains from trade that would result from lower transaction costs emanating from middleman activities.
• C) find that it is richer because the added transaction costs normally imposed by middlemen will be reduced.
• D) gain because the value of total output will rise.

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Definitions:

Private Property

The legal designation of the possession of property by non-governmental legal entities or individuals.

Private Enterprise System

An economic system where private individuals or groups have the right to own property and businesses and operate them for profit with minimal government interference.

Federal Taxes

Levies imposed by the government on income, corporate profits, and added to the cost of some goods, services, and transactions.

Not-for-Profit Organizations

Organizations that operate for purposes other than making a profit, focusing on serving the community or advancing social causes.