If there were no income inequality in a nation, its Lorenz curve would be:
A. convex.
B. a horizontal line.
C. an upward-sloping straight line with slope of 1.
D. concave.
Answer: C
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Do automatic fiscal stabilizers eliminate business cycles?
A) Yes B) No, because they have no effect if the business cycle is the result of some unanticipated change C) No, but they do moderate business cycles D) No, they increase the likelihood that a business cycle occurs E) No, they make business cycle fluctuations more severe
Terrance loses his job and immediately begins looking for another. Other things the same, the unemployment rate
a. increases, and the labor-force participation rate decreases. b. increases, and the labor-force participation rate is unaffected. c. is unaffected, and the labor-force participation rate increases. d. decreases, and the labor-force participation rate is unaffected.
A shortage creates a situation that forces prices to ________ while a surplus creates a situation that forces prices to ________.
A. increase; increase B. increase; decrease C. decrease; decrease D. decrease; increase
Other things being equal, a higher price induces
A. buyers to reduce the amount they want to buy and sellers to reduce the amount they are willing to sell. B. buyers to increase the amount they want to buy and sellers to increase the amount they are willing to sell. C. buyers to increase the amount they want to buy and sellers to reduce the amount they are willing to sell. D. buyers to reduce the amount they want to buy and sellers to increase the amount they are willing to sell.