The lowest quintile of households in the income distribution receives about:
A. 3.2 percent of the total income.
B. 3.4 percent of the total income.
C. 8.5 percent of the total income.
D. 10 percent of the total income.
Answer: A. 3.2 percent of the total income.
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In a monopolistically competitive market with Dixit-Stiglitz preferences, equilibrium price falls as the goods in the differentiated product market become more substitutable.
Answer the following statement true (T) or false (F)
"The Big Mac index is The Economist's burger-based measure of whether currencies are over- or undervalued.... [E]xchange rates should eventually adjust to make the price of a basket of goods the same in each country
Our basket contains just one item: the Big Mac hamburger, which is pretty much the same around the world." The Economist, July 28, 2012 Which principle is The Economist relying on when using the Big Mac to value exchange rates? A) interest rate parity B) market price parity C) purchasing power parity D) exchange rate parity
When the Fed buys securities from a bank, what happens to the monetary base and the quantity of money? Which changes by more or do both change by the same amount?
What will be an ideal response?
If a small unit tax is imposed on this market, the effect of this tax on the price suppliers receive will be greatest when: a. d is small and b is large
b. d and b are both small. c. d and b are both large. d. d is large and b is small.