What are the two views of fairness? How does each view redistribution of income from the rich to the poor?
What will be an ideal response?
One view is that "it's not fair if the result isn't fair." This view requires that income should be redistributed from the rich to the poor in order to create a fair result. Another view is that "it's not fair if the rules aren't fair." This view requires that private property may be transferred only under voluntary exchange, so redistribution of income is not fair unless it is voluntary.
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According to the Romer model, an increase in population will cause ________
A) an immediate increase in output per capita and a permanent increase in output per capita B) an immediate decrease in output per capita and a permanent increase in output per capita C) an immediate increase in output per capita and a permanent decrease in output per capita D) an immediate and permanent decrease in output per capita
Which of the following is an argument against trying to use policy to stabilize the economy?
a. Recessions represent a waste of resources. b. Pessimism on the part of households and firms may become a self-fulfilling prophecy. c. "Leaning against the wind" requires policymakers to increase aggregate demand in recessions and reduce aggregate demand in booms. d. Macroeconomic forecasting is not developed sufficiently to allow policymakers to change aggregate demand at the proper time.
A point outside (to the right of) the production possibilities curve of a nation:
A. Is not attainable for this nation B. Is easily attainable for this nation C. Implies that there are unemployed resources in this nation D. Implies that this nation is using its resources fully
As interest rates rise, more and more investments become profitable for a firm
a. True b. False Indicate whether the statement is true or false