What is a Lorenz curve and what is a Gini coefficient?
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What will be an ideal response?
A Lorenz curve is a curve that shows the distribution of income by arraying incomes from the lowest to the highest on the horizontal axis and indicating the cumulative fraction of income earned by each fraction of households on the vertical axis. A Gini coefficient is equal to the area between the line of perfect income equality and the Lorenz curve divided by the whole area below the line of perfect equality.
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Monetary policy goals include
i. maximum employment. ii. stable prices. iii. moderate long-term interest rates. A) i only B) ii only C) i and iii only D) i and ii only E) i, ii, and iii
Monopolistically competitive firms earn zero economic profit in the long run as do perfectly competitive firms. Does this mean that total surplus is maximized in a monopolistically competitive market?
What will be an ideal response?
The crowding-out effect indicates that an increase in a fiscal deficit financed by borrowing will increase interest rates and thereby crowd out some domestic investment spending
a. True b. False Indicate whether the statement is true or false
Suppose that there is a financial crisis, and people choose to spend less. As a result, velocity drops by 5 percent. According to market monetarists, if the GDP target growth rate is 3 percent, the Fed would need to increase the money supply by ______________ percent in order to achieve their GDP target
A) 8 B) 2 C) 4 D) 5