What would the Lorenz curve look like if the income distribution were equal?
What will be an ideal response?
If incomes were equal the Lorenz curve would look like a 45-degree line.
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Describe ways that governments can promote faster economic growth
What will be an ideal response?
If two goods are complementary,
a. a decrease in the price of one good will lead to a decrease in the demand for the other b. the cross elasticity of demand is zero c. an increase in the price of one good will lead to an increase in the demand for the other d. the cross elasticity of demand is positive e. a decrease in the price of one good will lead to an increase in the demand for the other
One explanation economists offer to explain why a decline in the unemployment rate can raise the rate of inflation rates is that
a. firms will be put in a position of competing more intensely for scarce resources b. people will pay higher prices because competition among the suppliers—the firms—intensifies c. workers will focus more directly on protecting their jobs d. firms will refuse to shift higher labor costs along to consumers for fear of losing their markets e. more workers will drop out of the labor market
New home construction is included in the consumption component of GDP
a. True b. False Indicate whether the statement is true or false