From left to right, the horizontal axis of the Lorenz curve ranks households from
A) smallest to largest.
B) largest to smallest.
C) poorest to richest.
D) richest to poorest.
Ques. 2Over a month in late 2008, the Federal Reserve Bank reduced the interest rate by 1 percentage point.
Given that the United States operates under a ________ exchange rate regimes, the primary purpose of these changes was ________ exchange rate of each currency. A) flexible; not designed to influence
B) flexible; designed to influence
C) fixed; designed to influence
D) fixed; not designed to influence
Ques. 3The quantity theory of money asserts that an increase in the quantity of money
A) will decrease the price level by an offsetting amount.
B) by n percent will lead to an increase in the price level by n + 1 percent.
C) will lead to an equal percentage increase in real GDP.
D) will lead to an equal percentage increase in the price level.
Ques. 4The greater the magnitude of the absolute value of the income elasticity of demand for a good, the more the
A) demand for that good changes when income changes.
B) total revenue for firms producing that good changes when income changes.
C) price of the good changes when income changes.
D) All of the above answers are correct.
Ques. 5The above figure shows the market for anti-freeze. The government imposes the sales tax shown in the figure on sellers. Automobile owners would pay a larger part of this tax than what is shown in the figure if the
A) demand were more elastic.
B) demand were more inelastic.
C) supply were more inelastic.
D) None of the above because the buyers always pay the entire amount of the tax.
Ques. 6In the figure above, suppose the original budget line is BD. A rise in the price of a compact disc will
A) rotate the budget line to AD.
B) rotate the budget line to CD.
C) not move the budget line.
D) result in a parallel leftward shift of the budget line.
Quick Reply
