In John Rawls' A Theory of Justice, people choose the rules for distributing income from behind a veil of ignorance. People understand that ability determines income, but they do not know their abilities or the abilities of others. Rawls argues that people are risk averse and will choose the distribution rule that maximizes their income in the worst case scenario (they have relatively little

ability). An economist would call this strategy
a. minimax.
b. maximin.
c. irrational.
d. tacit collusion.

b

Economics

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If policymakers increase aggregate demand, then in the short run the price level

a. falls and unemployment rises. b. and unemployment fall. c. and unemployment rise. d. rises and unemployment falls.

Economics

Which is not characteristic of a product with relatively inelastic demand?

A. The good is regarded by consumers as a necessity B. There are a large number of good substitutes for the good C. Buyers spend a small percentage of their total income on the product D. Consumers have had only a short time period to adjust to changes in price

Economics