The philosopher John Rawls argued that
a. people would choose income equality if they didn't know beforehand the "agreed upon rules" that determine people's economic position
b. people would choose income inequality to allow the maximum use of their individual talents
c. it would be impossible to determine beforehand how rich and poor people would choose between income equality and income inequality
d. people, uninhibited by social convention, would choose income inequality because they are, by nature, not inclined toward egalitarian values
e. government has a role to ensure income equality to prevent social unrest
A
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If the current account balance has a $70 million deficit and there was no change in official reserves during that year, then we know that
A) net transfers were -$70 million. B) the capital account balance must have a $70 million deficit. C) the balance of payments must register a $70 million surplus. D) the official settlements account balance must have a $70 million surplus. E) the capital and financial account balance must have a $70 million surplus.
How does the social problem of positive externalities differ from the problem created by negative externalities?
A) Positive externalities can create free-rider problems; negative externalities do not. B) Positive externalities are created by altruistic people; negative externalities are not. C) Negative externalities can create free-rider problems; positive externalities do not. D) Negative externalities are created by selfish people; positive externalities are not. E) Trick question: neither positive nor negative externalities create a social problem.
All of the following are government capital except
A) roads. B) schools. C) Treasury securities. D) mass-transit systems.
Vertical integration
A) is always driven by profitability concerns. B) results in lower transaction costs. C) may be undertaken to avoid government regulations. D) hampers timely delivery of inputs into the production process.