Other things equal, tax cuts favoring the rich and reductions in funding for government programs favoring the poor would be expected to:
A. increase income inequality, causing the Lorenz curve to bend away from the diagonal line.
B. decrease income inequality, causing the Lorenz curve to bend toward the diagonal line.
C. increase income inequality, causing the Lorenz curve to bend toward the diagonal line.
D. decrease income inequality, causing the Lorenz curve to bend away from the diagonal line.
Answer: A
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Last year Christine worked as a consultant. She hired an administrative assistant for $15,000 per year and rented office space (utilities included) for $3,000 per month. Her total revenue for the year was $100,000. If Christine hadn't worked as a consultant, she would have worked at a real estate firm earning $40,000 a year. Last year, Christine's accounting profit was ________ and her economic profit was ________.
A. $64,000; $49,000 B. $100,000; $64,000 C. $9,000; 0 D. $49,000; $9,000
Which of the following would most likely induce the Federal Reserve to conduct expansionary monetary policy? A significant decrease in
A) business taxes. B) income tax rates. C) oil prices. D) investment spending.
The deficit is
A) the amount by which government purchases, transfers, and net interest exceed tax revenues. B) the amount by which government purchases and transfers exceed tax revenues. C) the primary deficit minus net interest payments. D) total tax revenues minus net interest minus government expenditures.
Max has allocated $100 toward meats for his barbecue. His budget line and an indifference map are shown in the above figure. Which bundle will Max choose?
A) a B) b C) c D) d