The normal life cycle pattern of income
a. contributes to more inequality in the distribution of annual income and to more inequality in living standards.
b. contributes to more inequality in the distribution of annual income, but it does not necessarily contribute to more inequality in living standards.
c. contributes to less inequality in the distribution of annual income and to less inequality in living standards.
d. has no effect on either the distribution of annual income or on living standards.
b
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With respect to redistribution, one reason "The Big Tradeoff" exists is because
A) government programs employ resources that could have been productive elsewhere. B) government policymakers must choose between funding the various programs. C) government programs only employ resources that had no value to society otherwise. D) government programs only pay workers their opportunity cost.
Interest foregone on financial capital invested in a firm represents an economic cost
a. only if the firm borrows to finance capital investments. b. only when the funds are used to buy machinery. c. because funds invested in the firm could be earning interest elsewhere. d. because accountants have traditionally input an interest cost for this item.
Public choice theory assumes that those involved in the public sector are generally motivated by
A) public spirit. B) altruism. C) the desire to achieve allocative efficiency. D) the same factors involved in the private sector. E) a and b
The aggregate demand curve shows the relationship between the ________ and ________
A) inflation rate; quantity of real GDP demanded B) real interest rate: quantity of real GDP supplied C) nominal interest rate; quantity of real GDP demanded D) price level; quantity of real GDP demanded