People's incomes are relatively low when they are young, reach a peak in middle age, and then decline. This fact helps explain:
A. the wide variations of Gini ratios among nations.
B. the equality-efficiency trade-off.
C. why the lifetime distribution of income is more equal than the distribution in any given year.
D. why the lifetime distribution of income is less equal than the distribution in any given year.
Answer: C
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In the above figure, if the interest rate is 2 percent per year, the quantity of money demanded is
A) greater than the quantity of money supplied, and the interest rate will change. B) greater than the quantity of money supplied, and the demand for money curve will shift. C) greater than the quantity of money supplied, and the supply of money curve will shift. D) less than the quantity of money supplied, and the interest rate will change. E) less than the quantity of money supplied, and the demand for money curve will shift.
Refer to Figure 2-1. ________ is (are) unattainable with current resources
A) Point A B) Point B C) Point C D) Points A and C
The GDP Deflator is different than the CPI in that
A. the GDP deflator uses last year's prices and the present year's production, whereas the CPI uses present prices. B. the GDP deflator doesn't include food and energy prices. C. the CPI is chain-based. D. the CPI includes things businesses buy, while the GDP deflator does not.
The Fed has announced that it plans to lower the rate of monetary growth from 10% per year to 2% per year. You would expect this announcement to directly
A. increase money demand, shifting the LM curve up and to the left. B. increase money demand, shifting the LM curve down and to the right. C. decrease money demand, shifting the LM curve up and to the left. D. decrease money demand, shifting the LM curve down and to the right.