Suppose That Jamal Is Moving to a State Where Personal

question 105

Multiple Choice

Suppose that Jamal is moving to a state where personal incomes are distributed randomly. If Jamal believes in liberalism, he would prefer

• A)an income distribution that is relatively equal.
• B)that everyone has the same work opportunities and market-determined wage rates.
• C)that private property be transformed to government property to safeguard people's incomes.
• D)less economic assistance to the poor because it distorts the price system.

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Definitions:

Equilibrium Dollar Price

Refers to the price level at which the supply of dollars in the foreign exchange market is equal to the demand for dollars.

Flexible Exchange Rates

A foreign exchange system where the value of currencies is determined by market forces without direct government intervention.

Libras

A constellation in the zodiac, symbolized by the scales, or in a financial context, might be mistaken for "libra," which refers to a unit of weight or a former currency.

Freely Floating Exchange Rates

Exchange rates that are determined by the supply and demand for currencies in the foreign exchange market without direct intervention by countries' governments.