Which of the following statements is FALSE?
A. Income distributions have become less equal in the United States in the past 30 years.
B. The poverty rate measures the percentage of people living in households with incomes below the poverty line.
C. Higher taxes tend to reduce the incentive to work productively and innovate.
D. Worldwide, no countries are catching up to the United States with respect to GDP per capita.
Answer: D
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Which of the following variables is the key determinant in deciding whether goods are to be bought domestically or imported?
A) The real exchange rate B) The domestic interest rate C) The nominal exchange rate D) The foreign interest rate
Demand tends to be more elastic when:
A. price is high and more inelastic when price is low. B. price is low and more inelastic when price is high. C. demand is perfectly inelastic. D. the quantity demanded is larger.
Normative economics deals with ____ and positive economics deals with ____
a. what should be; what is b. fiction; fact c. microeconomics; macroeconomics d. negative aspects; positive aspects e. changing circumstances; same circumstances
Personal consumption expenditures:
a. represent close to two-thirds of GDP. b. are equal to personal income minus individual taxes. c. include durable good purchases but not nondurable good purchases. d. do not include any intangible consumption items. e. include all goods and services bought by the government.