What effect does the age of a household have when estimating the degree of inequality in income among households?
What will be an ideal response?
Household income changes over the life cycle of the household, which leads to an overestimation of inequality among households. At young ages, income is relatively low, peaks in middle ages, and then falls after retirement. The standard measures of income distribution do not account for age differences among households. They, therefore, overestimate the inequality because the distribution of lifetime income is more equal than the distribution of annual income.
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Answer the following statement true (T) or false (F)
The classical growth theory's view of the economy and its ability to achieve growth can be compared to a perpetual motion machine
Indicate whether the statement is true or false
You turn to the bond market page of a newspaper and look under the column headed "Net Chg" and see that it says, "-1/4" this indicates that
A. the closing price for the bond on this particular day was $2.50 lower than on the previous day. B. the closing price for the bond on this particular day is $0.25 lower than on the previous day. C. the yield for the bond has fallen by 0.25% compared to the previous day. D. the yield for the bond has fallen by 0.25% compared to exactly one year ago.
The flaw of the Classical model of the business cycle is that it
A) assumes away output fluctuations. B) assumes complete wage rigidity. C) assumes unrealistic fooling of workers. D) requires procyclical wage movements and continuous labor market equilibrium.