Which of the following is among the arguments in favor of using government intervention to reduce income inequality?
A. Large income differences eventually lead to political strife and will undermine support for a market economy.
B. Government intervention is more effective in promoting creativity and hard work than the hope of higher earnings.
C. The income distribution statistics understate inequality because they fail to take economic mobility into account.
D. Taking money away from individuals who have earned it is unfair and immoral.
Answer: A
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Which of the following factors could lead to an upward movement along the demand curve as indicated by the arrow?
i. an increase in the U.S. interest rate ii. a decrease in the U.S. interest rate iii. an increase in the expected future U.S. exchange rate. A) i only B) ii only C) i and iii D) ii and iii E) None of the factors could lead to the upward movement illustrated by the arrow. The figure above shows demand curves for dollars in the foreign exchange market.
Which of the following would be most likely to cause an increase in the demand for gold?
A) A decrease in the price of gold B) The expectation of a future decrease in the price of gold C) An increase in the price of gold D) The expectation of a future increase in the price of gold E) An increase in the supply of gold
Stimulating demand will improve the unemployment picture but
A. worsen inflation. B. decrease inflation. C. have no impact on inflation. D. None of the above is correct.
Which one of the following is part of our money supply?
A. Gold B. A credit card C. NOW accounts D. A personal check