Income supplements large enough to significantly increase the economic status of poor people will
a. encourage behavior that increases the risk of poverty.
b. create high implicit marginal tax rates that reduce the incentive of transfer recipients to earn.
c. provide low-income recipients with a strong incentive to work and increase their earnings so they will not be dependent on income transfers.
d. do both a and b.
D
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If the quantity of goods and services produced in the economy decreases,
A) real GDP would certainly increase. B) nominal GDP would certainly increase. C) it may be possible for nominal GDP to increase. D) it may be possible for real GDP to increase.
The natural rate of unemployment:
A. occurs at the economy's potential level of output. B. is zero. C. will cause a steady rise in the price level. D. All of these statements are true.
The Doing Business As name identifies a company for:
a. Bank accounts b. Sales c. Patents d. None of these
Futures markets and derivatives contribute to economic growth by:
A. increasing the risk-taking capacity of the economy. B. deterring the transfer of risk. C. decreasing speculation. D. forcing people to accept the risk their decisions create.