The Samaritan's dilemma describes the problem that exists when transfer programs, designed to help the poor, encourage choices that can promote or perpetuate
a. poverty.
b. healthier lifestyles.
c. reduced birth rates.
d. increased life expectancy.
A
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In the Keynesian model, a decrease in real autonomous spending results in a more than proportional decrease in real Gross Domestic Product (GDP) because
A) consumption decreases as a result of lower real disposable income. B) consumption increases while real disposable income decreases. C) real autonomous spending decreases further as real disposable income decreases. D) government spending also decreases.
An inflationary gap will occur when
a. real GDP exceeds nominal GDP. b. nominal GDP exceeds real GDP. c. real GDP exceeds potential GDP. d. potential GDP exceeds real GDP
Sound economic policy is policy that is consistent with
a. good intentions. b. quick action and frequent policy changes until positive results are achieved. c. monetary stability, free trade, and low tax rates. d. saving jobs, protecting domestic industry, and increasing tax revenue.
Using Figure 1 above, if the aggregate demand curve shifts from AD3 to AD2 the result in the short run would be:
A. P3 and Y1. B. P2 and Y1. C. P2 and Y3. D. P1 and Y2.