A less developed economy has greater income inequality the
a. less the economy is dependent upon agriculture
b. smaller the middle class
c. more the economy is dependent upon manufacturing
d. less diverse the level of manufacturing activity
e. greater the level of education in the country
D
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Which of the following statements is/are correct?
I. Depository institution managers undertake riskier actions than they otherwise would because of the existence of deposit insurance. II. Because of the existence of deposit insurance, depositors in savings and loans and other banks have little incentive to investigate the financial stability of these institutions. A) I only B) II only C) both I and II D) neither I nor II
If inflationary expectations increase, we can infer that: a. unemployment is above the natural rate
b. the economy is not on the long-run Phillips curve. c. the short-run Phillips curve is shifting to the left. d. output is below potential GDP. e. the unemployment rate is at the natural rate.
The ability-to-pay philosophy of taxation argues for a progressive form of taxation
a. True b. False Indicate whether the statement is true or false
If the economy is in long-run equilibrium:
A. current inflation should be less than expected inflation. B. current inflation should equal expected inflation. C. inflation should be accelerating. D. current output should be greater than potential output.