The percentage of the population in the two higher income classes (defined by Pew as having more than 200% of median family income) declined from more than 60% in the 1970s to 50% in 2015. Economists see the decline in the middle class as a
A. consequence of the decline in growth, not a cause of it.
B. Both a cause and a consequence of the decline in growth.
C. cause of the decline in growth, not a consequence of it.
D. Unrelated consequence to the decline in growth.
Answer: B
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Moral hazard is a barrier to financing global growth because
A) of the differences between financing using loans, portfolio investment and foreign direct investment. B) there is the possibility that the funds are used for riskier behavior than the lender agreed to. C) firms sometimes have trouble determining whether they need funds or not. D) if investors have trouble identifying high-risk firms they may be unwilling to give money to creditworthy firms.
Hurricane Katrina destroyed oil and natural gas refining capacity in the Gulf of Mexico. This subsequently drove up natural gas, gasoline, and heating oil prices. As a result, this should
A) move the economy down along a stationary short-run aggregate supply curve. B) shift the short-run aggregate supply curve to the right. C) move the economy up along a stationary short-run aggregate supply curve. D) shift the short-run aggregate supply curve to the left.
The importance of the float is that it
A) exists at all. B) fluctuates considerably. C) decreases total reserves. D) is very stable.
Recent studies on the effectiveness of fiscal policy tend to suggest that the government spending multiplier is less than 1.0
a. True b. False Indicate whether the statement is true or false