Aggregate income includes all of the following except:
A. transfer payments.
B. interest.
C. employee compensation.
D. rent.
Answer: A
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If the value of marginal product of the last worker hired is $24 and the wage rate is $25, then
A) more workers should be hired. B) the worker should be fired. C) the firm has hired the profit maximizing number of workers. D) the firm is earning $1 of profit from this worker.
Typically, the higher the level of income per person in a country, the higher the level of spending per person on health care. This relationship between income and spending indicates that health care is a
A) inferior good. B) necessity. C) normal good. D) luxury.
Absolute poverty measures vary from country to country. For example, in 2015, the poverty line in the United States for a family of four with two children
was an annual income of $24,250 but economists often use a much lower threshold income of $1 per day when calculating the rate of poverty in poor countries. How is this absolute poverty measured? A) by comparing the amount of goods and services that a household's income can purchase in one country to the amount of goods and services that a household's income can purchase in another country of comparable living standard B) by comparing the amount of goods and services that a household's income can purchase to an objective measure of the amount of income needed to sustain a certain predetermined standard of living C) by comparing the percentage of households living below the poverty line to the total population D) by comparing a household's income to the income required to maintain the average standard of living in a society at a particular time
Judy has just bought a car that is made in Germany. As far as the U.S. balance of payments is concerned this purchase is a(n)
A) accounting identity. B) special draw. C) surplus item. D) deficit item.