What is the stock market’s role in achieving efficient use of resources?
What will be an ideal response?
Investors channel their money to companies expected to earn high profits. Since profits increase with efficiency, the market rewards those firms that are seen to be efficient. However, some argue that individuals overemphasize short-term growth at the expense of long-term growth and that stock prices are gambling rather than a reward to efficiency.
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An attempt by a central bank to alter the money supply by buying or selling domestic assets
A) will leave both domestic money supply and foreign reserves unchanged. B) will cause an offsetting change in aggregate demand. C) will lead to a rise in domestic employment and output. D) will lead to a decrease in domestic employment and output. E) will cause an offsetting change in foreign reserves and leave the domestic money supply unchanged.
The basic liberal solution to welfare dependency is
A. government jobs. B. forcing the poor off welfare. C. ending immigration. D. identical to the conservative solution.
Define discrimination. Why does discrimination occur, and what evidence exists that it does occur?
What will be an ideal response?
Because the U.S. poverty line is an absolute measure rather than a relative one, the official U.S. poverty rate:
A. increased steadily when there was economic growth that raised the incomes of low-income families. B. fell steadily when there was economic growth that raised the incomes of low-income families. C. fell steadily when there was economic growth that caused inequality to grow among the population. D. increased steadily when there was economic growth that caused inequality to decline across the population.