Libertarians believe that
a. policy should aim for an income distribution that maximizes total happiness of all members of society.
b. large income disparities are likely to become a threat to political liberty.
c. the government should aim to improve the well-being of the worst off person in society.
d. people should be free to engage in voluntary transactions, even if large income disparities result.
Answer: d. people should be free to engage in voluntary transactions, even if large income disparities result.
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When we graph consumption as a function of national income rather than as a function of ________, the slope of this consumption function is the ________
A) disposable income; MPC B) personal income; MPS C) disposable income; MPS D) personal income; MPC
Central banks that have a hierarchical mandate with inflation targeting basically are saying:
A. hitting the inflation target comes first, everything else comes second. B. the inflation target is the second most important goal after economic growth, which is always the most important goal for monetary policymakers. C. hitting the inflation target is the only objective. D. hitting the inflation target is the first priority after all other stated objectives are reached.
Costs exist because ______.
a. the government establishes price controls b. goods and services are taxed and subsidized c. trade is a system of voluntary exchange d. resources are scarce and have competing uses
Which theories of the economy lead to the assertion that markets "self-adjust" to deviations from their long-term growth trend?
A. Keynesian theories B. Monetarist theories C. Classical theories D. Supply-side theories