The more bowed the Lorenz curve, the
A) richer the society.
B) more unequal the distribution of money income.
C) poorer the society.
D) more equal the distribution of income.
B
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When the demand for money becomes less responsive to changes in income, the LM curve becomes ________ and it also shifts to the ________
A) flatter, left B) flatter, right C) steeper, left D) steeper, right
The money multiplier
A) equals 1 over the required reserve ratio. B) is an expression that converts the monetary base to the money supply. C) is larger than the simple deposit multiplier. D) is completely controlled by the Fed.
On the graph above, a permanent tax reduction, assuming that there is a permanent effect on aggregate supply, is likely to move the economy from point 1 to point ________
A) 2 B) 8 C) 6 D) 3
Madison has an income of $50, which she spends on Pizza (P) and soft drinks (S). Her marginal rate of substitution is MRSPS = S/P. The price of pizza (PP) is $5 and the price of soft drinks (PS) is $2.50. Finally, the formula for her indifference curves is given by S = 2U/P (a) Find Madison's uncompensated demand curve for pizza. (b) Find Madison's compensated demand curve for pizza
What will be an ideal response?