The poverty rate is defined as:
A. the percentage of low income earners to high income earners.
B. the percentage of the population that falls below the absolute poverty line.
C. the lowest one percent of all income earners.
D. the percentage of the population that falls below the relative poverty line.
Answer: B
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To achieve long-run equilibrium in an economy with a recessionary gap, without the use of stabilization policy, the inflation rate must:
A. not change. B. increase. C. decrease. D. either increase or decrease depending on the relative shifts of AD and AS.
Which of the following is TRUE regarding markets?
I) Economists define a market as a geographic location where trade occurs. II) A market enables buyers and sellers to get information about each other and to buy and sell from each other. III) Markets coordinate decisions through prices. A) I only B) I and III C) II and III D) I, II and III
The key characteristics of a monopolistically competitive market structure include
A) many small (relative to the total market) sellers acting independently. B) barriers to entry are strong. C) all sellers sell a homogeneous product. D) sellers have no incentive to advertise their products.
Restrictive monetary policy will:
A. Decrease the lending capacity for banks. B. Reduce interest rates. C. Cause a rightward shift of aggregate demand. D. Raise the equilibrium price level.