In a world where people would have no prior information about where they are in an income distribution, given the choice, Rawls argues that they would prefer
a. an income distribution that is relatively equal
b. that everyone has the same work opportunities and then let incomes be what the market generates
c. to rely on their abilities so accept high levels of income inequality
d. that private property be transformed to government property to safeguard their incomes
e. less economic assistance to the poor because it distorts the price system
A
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Whenever a nation has substantial external debts and assets denominated in foreign currency:
A) it is easier to manage, since changes in value are often offsetting. B) there can be large and destabilizing wealth effects. C) its interest payments on the debt will be matched by interest earnings on the assets. D) the risk of default becomes very large.
Aggregation is the process of
A) calculating real GDP based on nominal GDP and the price index. B) summing individual economic variables to obtain economywide totals. C) forecasting the components of GDP. D) predicting when recessions will occur.