Compare the distribution of income in the United States with the distribution of income in other high-income countries
What will be an ideal response?
Income in the United States is distributed less equally than in other high-income countries.
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A good economic model
A) describes every aspect of the economic world, with no exception. B) includes all those features of the world that can be described numerically. C) includes only those features of the world that are needed for the purpose at hand. D) should not include more than two variables.
Some call the Great Recession the:
A. period when the economy does not grow for four consecutive quarters. B. recession that began in 2007 due to the decline in consumer spending when the housing bubble burst. C. period of high inflation that took place in the early 1970s. D. period of economic stagnation that took place in the early 1990s.
The creation of the European Monetary Union in 1999 lowered nominal interest rates in countries like Italy, because:
a. The creation of a supranational central bank reduced expected inflation. b. The supranational central bank increased the money supply rapidly, thereby causing interest rates to fall. c. Actually, interest rates in Italy exploded after the creation of the European Monetary Union, due to the lack of initial confidence in the European Central Bank. d. All of the above. e. None of the above.
Assume that foreign capital flows into a nation rise due to expected increases in stock market appreciation. If the nation has highly mobile international capital markets and a fixed exchange rate system, what happens to the real risk-free interest rate and monetary base in the context of the Three-Sector-Model? a. The real risk-free interest rate falls and monetary base falls
b. The real risk-free interest rate rises and monetary base falls. c. The real risk-free interest rate and monetary base remain the same. d. The real risk-free interest rate falls and monetary base rises. e. There is not enough information to determine what happens to these two macroeconomic variables.