The absolute poverty line
a. decreases as real income grows.
b. shows the average income of the lowest income group.
c. can be measured with the Lorenz curve.
d. None of the above.
Answer: d. None of the above.
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Suppose the respective prices of yogurt, candy bars, and popcorn in Year 1 are $1, $2, and $3 . In Year 2, the unit prices of each are $2, $3, and $4 respectively. Which of the following statements is true of the price level between Year 1 and Year 2? a. It decreased by 20 percent
b. It increased by 33 percent. c. It increased from $6 to $9. d. It decreased at a rate between 20 percent and 50 percent. e. It increased at a rate between 33 percent and 100 percent.
Given full-employment output = $2,800, equilibrium real GDP = $2,500, and MPS = 0.25, which of the following changes would most likely bring the economy to a full-employment level of real GDP?
A. $300 decrease in taxes. B. $75 increase in government spending. C. $75 decrease in taxes. D. $75 decrease in government spending.
In a certain city, the local government regulates the destruction of historic buildings and provides tax breaks to owners of historic buildings who restore them. These government policies
a. reflect the fact that restored historic buildings convey a positive externality. b. reflect the fact that the destruction of historic buildings conveys a positive externality. c. are likely to worsen the market failure that is associated with historic buildings and the restoration of such buildings. d. are likely to decrease the well-being of society as a whole.
A quota is
A. A tax imposed on imported goods. B. A prohibition against trading a good. C. An elimination of trade to nurture an infant industry. D. A limit on the quantity of a good that may be imported in a given time period.