In a Lorenz curve diagram, the 45° line represents:
A. perfect income equality.
B. zero inflation.
C. a negative income tax.
D. an extremely unequal distribution of income.
Answer: A
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In the New Keynesian open economy model, suppose the exchange rate is flexible and there is a decline in total factor productivity
A) expansionary fiscal policy is necessary. B) contractionary monetary policy is necessary. C) expansionary monetary policy is necessary. D) no policy intervention is necessary.
"Unlike a perfect competitor, a profit-maximizing monopolist produces at an output rate at which marginal revenue exceeds marginal cost." Do you agree or disagree? Why
What will be an ideal response?
Moral hazard:
A. is about the unobserved characteristics of people. B. is about the unobserved actions of people. C. occurs before the parties have entered into an agreement. D. None of these statements is true.
The marginal benefit of pollution abatement is the
A. additional cost to clean up an additional unit of pollution. B. total social costs of pollution clean-up divided by total social benefits. C. additional benefit from cleaning up an additional unit of pollution. D. total social costs of pollution clean-up divided by the total units of clean-up.