Make a case for income inequality.
What will be an ideal response?
First, by rewarding people for their productivity by paying them wages equal to their MRPs, people have the incentive to work and improve their skills. Since MRPs vary, people must receive different wage rates, even though this will lead to income inequality. Second, because the rich can afford to save a higher percentage of their income than can the poor, they tend to do the economy's investing, thus generating economic growth that benefits everyone.
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The quantity of real GDP supplied increases when the price level increases because
A) the quantity of money increases. B) the real wage rate rises. C) aggregate demand increases. D) investment increases. E) the real wage rate falls.
The gravity model offers a logical explanation for the fact that
A) trade between Asia and the U.S. has grown faster than NAFTA trade. B) trade in services has grown faster than trade in goods. C) trade in manufactures has grown faster than in agricultural products. D) Intra-European Union trade exceeds international trade by the European Union. E) the U.S. trades more with Western Europe than it does with Canada.
Low cost strategies are usually found in industries where
a. Products are not particularly differentiated b. Price competition tends to be fierce c. Both a and b d. None of the above
A private firm that sustains a financial loss because of an antitrust violation may be able to recover three times the actual damages
a. True b. False