The degree of inequality in income distribution based on single-year data is:
A. Understated even though it takes into account income mobility
B. Overstated because it does not take into account income mobility
C. Understated because it does not take into account income mobility
D. Overstated even though it takes into account income mobility
B. Overstated because it does not take into account income mobility
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Which of the following will shift an economy's production possibilities curve inward?
A. an improvement in technology B. an increase in the unemployment rate C. a decrease in land, labor or capital D. a decrease in the unemployment rate
Who ends up paying when sunk costs are incurred as a result of erroneous forecasting?
A) No one pays them because they are sunk. B) The consumer, because they eventually show up as higher prices. C) The government, since they fall evenly on the entire community. D) The taxpayer, because they produce a decline in assessed valuations. E) Whoever invested in the unsuccessful project.
A bank has excess reserves of $6,000 and demand deposit liabilities of $100,000 when the required reserve ratio is 20 percent. If the reserve ratio is raised to 25 percent, the bank's excess reserves will be
A) -$5,000. B) -$1,000. C) $1,000. D) $5,000.
In the long run, a year-long drought that destroys most of the summer's wheat crops causes permanently:
A. higher prices. B. lower prices. C. lower output. D. None of these is true.