The richest 10 percent of U.S. houses hold more than two-thirds of all wealth. The problem with this statement is that
A) it does not consider an individual's current income.
B) it does not consider private and public pension plans.
C) it is based entirely on nonhuman wealth.
D) it is based entirely on human wealth.
Answer: B
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Expenditure and tax multipliers are likely to be large
A) if the economy is experiencing deflation. B) when real interest rates rise rapidly. C) during severe recessions. D) if the economy has negative cyclical unemployment.
Time inconsistency refers to a situation where:
A. we change our minds about what we want in response to gaining complete information. B. we change our minds about what we want simply because of the timing of the decision. C. we typically choose the same thing, regardless of when the decision is being made. D. None of these statements is true.
The 1910–1914 period was chosen as a benchmark period for determining parity prices because that was when
a. there was the greatest number of farms b. corn prices were the highest c. farmers believed that farm and nonfarm prices were such that farms goods tradedequal value for equal value with nonfarm goods d. the exchange standard was most biased in favor of farmers e. farm productivity was the lowest
If the euro/U.S.dollar exchange rate is 1.1€/U.S. $ in New York but 1.05€/U.S. $ in London, we should see:
A. people selling euros and buying dollars in New York and then buying euros by selling dollars in London. B. the dollar should appreciate in New York relative to the euro. C. people selling U.S. dollars and buying euros in New York and then selling those euros and buying $'s in London. D. the price differential between the markets increase as people seek to take advantage of the situation.