Suppose that Jamal is moving to a state where personal incomes are distributed randomly. If Jamal believes in liberalism, he would prefer
a. an income distribution that is relatively equal.
b. that everyone has the same work opportunities and market-determined wage rates.
c. that private property be transformed to government property to safeguard people's incomes.
d. less economic assistance to the poor because it distorts the price system.
a
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The self-correcting tendency of the economy means that falling inflation eventually eliminates:
A. exogenous spending. B. recessionary gaps. C. expansionary gaps. D. unemployment.
Excess reserves make a bank less vulnerable to runs, but bankers do not like to hold excess reserves because holding excess reserves
A. are disliked by depositors. B. means lower profits for banks. C. are discouraged by government regulators. D. All of these responses are correct.
All of the following statements about inflation in the United States are correct except
A. Since the Great Depression, average prices have risen almost every year. B. The inflation rate was 13.5 percent in 1980. C. Inflation was at its worst during the Great Depression. D. Prior to World War II, the United States experienced periods of both deflation and inflation.
The simple model of competition among political parties long used by political scientists tends to lead to the practical solution of selecting the
A) optimal tariff. B) prohibitive tariff. C) zero (free-trade) tariff. D) the tariff rate favored by the median voter. E) the tariff rate supported by exporters.