Your textbook mentions four arguments against government intervention to reduce inequality. List any three of these.
What will be an ideal response?
The list should include any three of these: taking money away from individuals who have earned it is unfair and immoral; allowing big rewards to go to the most successful performers helps motivate creativity, innovation, and hard work; a policy devoted to reducing inequality eventually leads to political control of the economy and rent-seeking behavior; the income distribution statistics overstate inequality because they fail to take economic mobility into account.
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Activities that encourage faster growth are
A) high levels of consumption and low levels of savings. B) high levels of saving and investment in human capital. C) imposing trade barriers to limit international trade and thereby protect national industries. D) limiting property rights so that everyone can use any invention. E) taxes on saving that serve to encourage more spending and less saving.
In the health insurance market, moral hazard occurs when
A) chronically ill people buy insurance. B) insured people go to the doctor unnecessarily. C) patients sue their doctor. D) chronically ill people refuse appropriate medical treatment.