Explain the importance in understanding the difference between income inequality and consumption inequality
What will be an ideal response?
When analyzing someone’s well-being, comparing annual consumption may be more meaningful than their annual income. Recent findings have shown the differences in consumption inequality are far less than the inequality of incomes. The products consumed by the rich and the poor are far closer in functionality today than at any other time in history.
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Open-market operations affect the supply of reserves.
Answer the following statement true (T) or false (F)
Which would most likely shift the aggregate supply curve? A change in:
A. government spending. B. excess capacity in business. C. prices of imported resources. D. consumer expectations.
From an initial long-run macroeconomic equilibrium, if the Federal Reserve anticipated that next year aggregate demand would grow significantly slower than long-run aggregate supply, then the Federal Reserve would most likely
A) increase income tax rates. B) decrease income tax rates. C) increase interest rates. D) decrease interest rates.
Related to the Economics in Practice on p. 466: Early results from the Save More Tomorrow retirement plans have shown ________ in the savings rates of the enrolled.
A. dramatic increases B. significant decreases C. mixed results D. very little change