If income were distributed equally, the Gini coefficient would
a. equal zero.
b. look like a backward “L”.
c. have the same value as the Lorenz coefficient.
d. have a value of 1.
a. equal zero.
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Answer the following statements true (T) or false (F)
1. Concern with the level of employment in the economy is a macroeconomic issue. 2. Microeconomics is a study of aggregates in the economy. 3. An economy’s wealth consists of a multitude of consumer and capital goods. 4. Economic services lack the characteristic of transferability found in economic goods.
When plotted with the aggregate price level on the vertical axis and output on the horizontal axis, the short-run aggregate supply curve (in the absence of misperceptions)
A. slopes upward. B. slopes downward. C. is vertical. D. is horizontal.
According to the benefits-received principle of taxation
A) people in the same economic situation should bear an equal share of the tax burden. B) the benefits of government programs such as national defense are shared equally by all people; therefore, the burden of paying for these programs should be shared equally. C) because high-income individuals receive the most benefits from government programs, they should pay more taxes than lower-income individuals. D) individuals who receive the benefits from a government program should pay the taxes that support the program.
Describe an arms race in economic terms. Is it rational for countries to participate in an arms race?
What will be an ideal response?