Kuznets' inverted-U hypothesis
a. implies that things must get worse before they get better.
b. suggests that inequality will worsen and then improve as a country grows.
c. suggests that inequality will improve and then worsen as a country grows.
d. points out six characteristics of modern economic growth.
Answer: b. suggests that inequality will worsen and then improve as a country grows.
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Facing choices between beer and pizza, the number of pizzas a consumer would be willing to trade for just one beer is called
a. the marginal value of beer in terms of pizza. b. the marginal value of pizza in terms of beer. c. the demand for beer. d. an undesirable trade.
An increase in unemployment benefits ________ and an increase in international competition that changes the location of jobs ________
A) increases frictional unemployment; increases structural unemployment B) increases structural unemployment; decreases frictional unemployment C) decreases cyclical unemployment; decreases cyclical unemployment D) decreases cyclical unemployment; increases cyclical unemployment E) decreases structural unemployment; decreases cyclical unemployment
According to the quantity theory of money, if the long-run economic growth rate is 2.5%, by how much should the Fed increase the money supply if it wants inflation to be 2%?
A) 0.5% B) 1.25% C) 4.5% D) 5%
The negative externality in a pesticide or other chemical market
a. is associated mainly with production of the chemical b. is primarily a consumption externality c. should be modeled as a marginal external cost (MEC) d. is appropriately captured by the MSC function