If the tax-returns and capital gains effect were accounted for in the measurement of income inequality, ________.
A. the top 1% share of income would have decreased by 1.4% from 1978 to 2007
B. the top 1% share of income would have tripled from 1978 to 2007
C. the top 1% share of income would have remained at 8% in 1978 and 2007
D. the top 1% share of income would have less than doubled in value from 1978 to 2007
Answer: D
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To say that stock prices follow a "random walk" is to argue that stock prices
A) rise, then fall, then rise again. B) rise, then fall in a predictable fashion. C) tend to follow trends. D) cannot be predicted based on past trends.
When the credit spread rises, an effective policy response might be to ________
A) lower the real interest rate on safe assets B) prevent the real federal funds rate from falling below zero C) pursue nonconventional monetary policies to restore the functioning of financial markets D) announce swift and stern action against those responsible for the financial disruption
If a firm doubles all of its inputs and its output triples, it is said to be experiencing
a. diminishing marginal returns. b. increasing marginal returns. c. diseconomies of scale. d. economies of scale. e. constant average costs.
Which of the following is NOT one of the concerns that economists have about the Fed's use of quantitative easing (QE)?
A. That long-term interest rates may become negative B. That interest rates will rise sharply when QE is reversed C. That too much money is being added to the economy D. That it will eventually lead to inflation