Which of the following would cause the poverty threshold income level for a given family to increase by 20 percent from one year to another?
a. a 20 percent increase in the family's income
b. a 20 percent decrease in the family's income
c. a 20 percent increase in the general level of prices
d. a 20 percent increase in real national income
C
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If a demand curve for a good is perfectly inelastic, then the seller could
A. increase price and not change the number of units purchased. B. ignore the effects of costs on its profits. C. rely on buyers to look for other products if it increases price. D. sell more units by advertising.
When other countries threatened to limit Japanese imports, Japan took steps to:
A. increase the value of the yen and increase its trade surplus. B. decrease the value of the yen and decrease its trade surplus. C. increase the value of the yen and decrease its trade surplus. D. decrease the value of the yen and increase its trade surplus.
A central concept of New Keynesian macroeconomics is that in setting prices and wages, self-interested firms and workers are acting
A) irrationally, since their self-interest is badly damaged by the ensuing business cycles. B) irrationally, since this imposes business cycles on everyone not part of their arrangements. C) rationally, since they do not bear a fully offsetting cost of business cycles. D) rationally, since the total welfare loss of business cycles must be small enough to justify the price and wage setting.
The quantity theory of money and prices asserts that
A) increases in the money supply lead to inflation. B) increases in the money supply lead to an increase in the velocity of money. C) increases in the money supply lead to a decrease in the velocity of money. D) increases in the money supply will increase real GDP.