Income inequality exists in the United States. Is this necessarily a bad thing? Explain how our assessment of income inequality depends crucially on the source of that inequality
In a market economy, the distribution of income reflects the voluntary trades made by fully informed consumers and businesses. Those who provide goods, services, or resources that are highly valued by others will receive high incomes. Since all people differ in ability, education, preferences, and other factors, we would expect that people will receive different incomes. If the process that generates the income distribution is fair, many would agree that the resulting distribution is fair as well. Of course, if the process that distributes income is not fair--if it involves coercion or fraud, for example--we may very well be dissatisfied with the resulting distribution.
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Within the Keynesian cross, the adjustment towards equilibrium occurs through:
A) inflation. B) inventories. C) interest rates. D) none of the above.
Discrimination lowers the average wage of members of one group of workers in spite of laws that require equal pay for all workers
a. True b. False Indicate whether the statement is true or false
In the classical model, beginning from an equilibrium in which the government is running a budget surplus
a. the supply of loanable funds will be horizontal b. an increase in government spending will cause the interest rate to rise c. the supply of loanable funds will be vertical d. an increase in government spending will crowd out less than an equal amount of private spending e. a decrease in government spending will crowd out less than an equal amount of private spending
A factor of production with unique attributes is able to command a scarcity rent determined by market demand
Indicate whether the statement is true or false