The path of income over a lifetime is likely to be much more stable than the path of consumption.
Answer the following statement true (T) or false (F)
False
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How has income inequality changed in recent years? What factors account for the changes?
What will be an ideal response?
If the Fed increases the discount rate, it is pursuing
A) a contractionary policy because it will be more costly for banks to borrow funds and this puts upward pressure on interest rates in the economy. B) a contractionary policy because it reduces banks' profit margins by raising the cost of borrowing and lowering the return on lending. C) an expansionary policy because it raises the cost of holding excess reserves in the banking system. D) an expansionary policy because it increases bank profits by putting upward pressure on the interest rates that banks can charge on its loans
What does it mean for a firm to be a price taker in the labor market?
What will be an ideal response?
A tax reduction of a specific amount will be more expansionary the:
A. smaller is the economy's MPC. B. larger is the economy's MPC. C. smaller is the economy's multiplier. D. less is the economy's built-in stability.