Gem's Principal Asked Her to Pick Up His Dry-Cleaning on Her

question 2

Multiple Choice

Gem's principal asked her to pick up his dry-cleaning on her way to work. After she had picked up the dry-cleaning and was driving to work, Gem knocked over an old man crossing the street because she did not apply the brakes in time. Under the theory of ________, Gem's principal is liable to the injured man.

• A) intentional tort
• B) negligence
• C) liability with fault
• D) vicarious liability

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Definitions:

Real Wealth Effect

The change in consumption patterns due to changes in purchasing power, often resulting from price level changes that affect the real value of assets and liabilities.

Aggregate Demand Curve

A graphical representation showing the relationship between the total demand for goods and services in an economy and the overall price level.

Price Level

The average of all current prices for goods and services in an economy, often measured by a price index.

Keynesians

Economists who follow the theories of John Maynard Keynes, emphasizing the role government should play in moderating economic cycles through fiscal and monetary policies.