Econ 40 4

When the interest rate equals 10%, the present discounted value of a $1000 payment that is due in one year is closest to

$900

An institution that makes savings available to investors is known as

A financial intermediary

Which of the following is a gain from trade?

A higher standard of living for all trading countries

A progressive tax is

A tax system in which tax rates rise as income rises

When foreign countries buy wheat grown in the United States, they are generating a

Demand for U.S. dollars and a supply of a foreign currency

When the overall trade balance is zero

Exports equal imports

Higher interest rates

Increase the quantity of loanable funds

One of the keys to reducing poverty is

Increased economic growth

Poor nations typically have a competitive advantage in agricultural goods because of

Low labor costs

When a grogram is means-test, it means that

T be eligible, the recipient must be poor

The size distributions of income

Tells how personal income is divided up among household or income classes

The breakeven level of income

The highest level of income a household can earn and still receive welfare benefits

Wealth refer to

The market value of assets people own

The trade surplus is the amount by which

The value f exports exceed the value of imports in a give time period

Net exports are calculated as

The value of exports minus the value of imports

According to the text, which of the following does the United States import?

Toys, coffee, and shoes

Which of the following is an example of a direct income transfer?

Welfare benefits Social Security payment Unemployment benefits *All of the above

The depreciation of a country's currency causes the price of imports to

rise and the prices of exports to fall

Present discounted value refers to the

value today of future payments adjusted for interest accrual

Suppose an Austrian company decides to purchase a new computer from IBM (an American company). The dollar price of the computer is $50,000. At the equilibrium exchange rae in the above figure, the computer will cost the Austrian company:

100,000 euros

According to text, which of the following does the United States export?

Cars, cigarettes, corn, farm equipment and education

The owners of which type of firm have the least liability?

Corporation

The general approaches to global poverty reduction include all of the following except

Economic growth that raises average incomes Redistribution of incomes across nations redistribution of incomes within countries *An increase in government control of resources

The Lorenz curve illustrates the

Extent of income inequality

Which of the following is an argument in favor of free trade

Greater efficiency through specializtion

If the United States raises tariffs on foreign goods it may achieve

Greater profitability of import-competing firms

Comparative advantage in production is achieved by

Having a lower opportunity cost of producing a good relative to that of other countries

The tax elasticity of labor supply measures the

Response of workers to a change in the tax rate

The function of financial intermediaries is to transfer purchasing power from

Savers to dissavers

The federal (progressive) income tax is designed to

Shift the Lorenz curve inward

The poverty gap is the

Shortfall between a household's actual income and the poverty threshold

Public housing is an example of

in-kind income

Depreciation of the dollar refers to

When it takes more dollars to buy a foreign currency

The exchange rate is the

Price of one country's currency expressed in terms of another country's currency

Places where foreign currencies are bought and sold are

Foreign-exchange markets

The appreciation of the U.S. dollar can be caused by

An increase in the demand for dollars

capital gains are

An increase in the market value of an asset

American citizens planning a cacation abroad would welcome

Appreciation of the dollar

The granting of small, unsecured loans to small business and entrepreneurs is know as

Microfinance

As long as interest-earning opportunities exist, present dollars are worth

More than future dollars

In order for poor nations to grow out of stage 1, farm productivity must rise beyond subsistence levels so that workers can

Move to jbs in other industries

The decision to save is influenced by all of the following except

Occupation

Welfare programs differ from social insurance programs in that welfare programs

Offer benefits only to the needy

Transfer payment are

Payments to individuals for which no current goods or services are exchanged

The best measure of average income for a county is

Per capital GDP

Income inequalities are greatest in

Poor countries such as Namibia

Changes in the value of the euro affect the economies of

Potentially the entire would

High marginal tax rates can

Recue work effort

Which of the following programs is the largest federal income transfer program?

Social Security

The minimally adequate living standard for a U.S. family of four is know as the

U.S. poverty threshold