Explain the two theories of desired income distribution: the egalitarian principle and the productivity standard
What will be an ideal response?
The egalitarian principle suggests that income should be distributed equally across all individuals in society. The productivity standard suggests that people should be rewarded according to merit, with merit being judged by one's ability to produce what is considered valued by society.
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Which of the following statements best serves as a summary of the other statements?
a. Low income can mean poor nutrition during the formative years, which can retard mental and physical development b. Low income and low productivity may reinforce each other in a cycle of poverty c. Low productivity obviously results in low income d. Low income means less saving and less saving means less investment in human and physical capital e. Poverty can result in less education, less capital formation, a poor diet, and little health care
An expansionary monetary policy is most likely to produce an inflationary effect with little impact on output when the economy
a. is near full employment and the aggregate supply curve is horizontal. b. is near full employment and the aggregate supply curve is vertical. c. has substantial unemployment and the aggregate supply curve is vertical. d. has substantial unemployment and the aggregate supply curve is horizontal.
Which of the following would increase the incentive of consumers to economize and of producers to provide medical services at economical prices?
a. substitution of catastrophic health insurance plans for low deductible, low co-payment plans b. more reliance on medical savings accounts rather than insurance c. equalization of tax treatment between out-of-pocket medical expenses and employer-provided health insurance d. all of the above
A real depreciation will initially cause a reduction in output when which of the following holds?
A) the Marshall-Lerner condition B) the J-Curve effect C) net exports are initially zero D) net exports are initially negative E) net exports are initially positive