A perfectly straight Lorenz curve would mean:
A. perfect inequality, and it does not exist in the real world.
B. perfect inequality, and is more common among the developing nations.
C. perfect equality, and it does not exist in the real world.
D. perfect equality, and is more common among the wealthy, developed nations.
Answer: C
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If a government had a debt of $300 billion and then ran deficits of $200 billion each year for the next three years, by the end of the third year its total debt would be
A) -$300. B) $300 billion. C) $600 billion. D) $900 billion.
Which of the following is not considered part of government spending?
A) a military jet purchased by the federal government B) a nature preserve purchased by a state government C) social security payments to retirees D) teachers' salaries paid by a local government
Refer to Figure 1-5. Calculate the area of the triangle A
A) $8.4 million B) $6.3 million C) $3.15 million D) $2.1 million
Which of the following is true? a. The money supply will tend to fall when the Fed pays a higher interest rate on bank reserves
b. If banks never wanted to hold excess reserves, decreasing the interest rate the Fed pays on reserves would not increase the money supply. c. If banks hold excess reserves, the actual money multiplier would be less than potential money expansion. d. All of the above are true