Which of the following is correct?
a. the Gini coefficient is a measure of income inequality based on the Lorenz curve
b. developed countries tend to have a higher degree of income inequality than less developed countries
c. both of the above
d. neither of the above
Answer: a. the Gini coefficient is a measure of income inequality based on the Lorenz curve
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Suppose a price index is formed to measure changes in the price level between 1999 to 2005. A price index based on changes in the cost of the basket of goods purchased by the typical consumer in 2005 is called a
a. relative price index. b. consumer price index. c. Laspeyres price index. d. Paasche price index.
Individual consumers supply ________ and purchase ________.
A. intermediate goods; final goods and services B. final goods and services; factors of production C. factors of production; final goods and services D. national goods and services; factors of production
Surge in government demand (G) discourages some private demand (I) and this is a major reason as to why the oversimplified formula: 1/(1–MPC) ____________ the size of the multiplier.
A. exaggerates B. underestimates C. has no impact on D. none of these
If the marginal cost curve is above the average variable cost curve, then
A. average variable cost is decreasing. B. marginal cost is decreasing. C. average variable cost is increasing. D. average variable cost is constant.