A utilitarian government will pursue policies that redistribute income from the rich to the poor. One problem with these policies is that
a. everyone has less incentive to work hard.
b. the rich will work harder while the poor will not.
c. the poor will work harder while the rich will not.
d. everyone in the middle class ends up worse off.
a
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When there is an expansionary gap, inflation will ________, in response to which the Federal Reserve will ________ real interest rates, and output will ________.
A. decline; lower; expand B. increase; raise; decline C. decline; lower; decline D. decline; raise; decline
Does low human capital cause poverty or does poverty cause low human capital?
A. The causality works both ways. B. Poverty causes low human capital, not the other way around. C. There is no causal link between low human capital and poverty. D. Low human capital causes poverty, not the other way around.