If everyone had the same income, then the Lorenz curve would:
a. be the line of income equality.
b. bow down below the line of income equality.
c. be a parallel line lying below the line of income equality.
d. bow up above the line of income equality.
e. be a curve that intersects the line of income equality at its mid-point.
a
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Financial intermediaries reduce individual risk because they pool the funds of savers
Indicate whether the statement is true or false
In the long run, the nominal exchange rate
A) is a monetary phenomenon, determined by the quantities of money in two countries. B) is not related to the real exchange rate, since the real exchange rate is the true value of currencies. C) will not change if prices in one country change, since prices are nominal variables. D) is fixed by world central banks, as indicated by the fixed exchange rate system.
If the inflation rate target is 2%, the current inflation rate is also 2%, and the output gap is zero, then according to the Taylor rule, the nominal federal funds rate should be ________ percent
A) zero B) two C) four D) three E) none of the above
A binding price floor is designed to:
a. increase efficiency. b. raise the price above the equilibrium price. c. keep the price below the equilibrium price. d. generate a shortage