The Gini coefficient is really a point estimate of equality at a certain time period. Why is this a limiting factor when it comes to examining issues of equality over a lifetime?
What will be an ideal response?
Typically, increases in the proportion of young or old members of a society will drive apparent changes in equality. Because of this, factors such as age distribution within a population and mobility within income classes can create the appearance of difference in equality when none exist taking into account demographic effects.
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Is increased capital spending the only way for an economy to expand its production possibilities frontier?
A. No, an economy can also expand by invention and innovation. B. No, an economy can also grow by investment instead of capital spending. C. Yes, more capital is the only way to expand its production possibilities frontier. D. Yes, although more capital clearly has a high opportunity cost. E. Yes, because capital is the only constraining resource that limits growth.
Suppose the current price and quantity of widgets is p = $50 and Q = 125
The demand for widgets is log-linear and the price elasticity of demand is E = -2. The supply of widgets is perfectly elastic. a. Derive the equations for the demand and supply of widgets. b. What would be the effect on the equilibrium price and quantity if demand were to increase by 500 widgets?
An example of an intermediate good would be a(n)
a. new car. b. used car. c. new tire for a used car. d. tire for a new car. e. All of the above.
Which of the following was the result of the Federal Reserve's purchase of mortgage-backed securities in 2009?
a. MBS interest rates declined, home mortgage rates declined, and the Fed turned a profit on these operations. b. MBS interest rates declined, home mortgage rates declined, but the Fed had a loss on these operations. c. MBS interest rates increased, home mortgage rates declined, and the Fed turned a profit on these operations d. MBS interest rates increased, home mortgage rates increased, but the Fed had a loss on these operations