How do population growth and economic growth impact global poverty?
What will be an ideal response?
Poverty has to do with how much output individuals have access to or the standard of living for a country. Economic growth, which is an increase in output or real GDP, is important in reducing poverty, but population growth also plays a role. If GDP increases more rapidly than the population, then the value of output divided by the population (per capita GDP) rises. If GDP increases, but at a slower rate than the population, there is less output available per person and per capita GDP falls. This is a common problem in poor countries where the population growth rates are typically much higher than in rich countries.
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When a nation is producing the allocatively efficient quantity of a product, the marginal benefit of producing the good equals the marginal cost of producing that good
Indicate whether the statement is true or false
Decreasing the reserve requirement ratio is
A) a contractionary policy because it lowers the amount of total reserves in the banking system. B) a contractionary policy because it lowers the amount of excess reserves in the banking system. C) an expansionary policy because it raises the amount of excess reserves in the banking system. D) an expansionary policy because it raises the amount of required reserves in the banking system.
Does a state sales tax function as a progressive, regressive, or proportional source of revenue, and why?
What will be an ideal response?
When a recession hits, we would expect the government to run a budget deficit by raising the level of its spending or by cutting taxes, or perhaps both. The Fed would be expected to:
A. reduce the required reserve ratio, increase the discount rate, and buy securities on the open market. B. reduce the required reserve ratio, reduce the discount rate, and sell securities on the open market. C. reduce the required reserve ratio, reduce the discount rate, and buy securities on the open market. D. increase the required reserve ratio, reduce the discount rate, and sell securities on the open market.