Macro quiz 2

According to the circular flow, short-term equilibrium analysis of the Great Depression, government intervention was necessary to restore economic health because: a. Businesses would not hire the unemployed until they saw an increased demand for their products. b. The unemployed could not increase demand until they found work and earned income. c. Unlike businesses, the federal government could hire people and spend money without worrying about profits. d. All of the above. e. None of the above

d

Suppose you are on a week-long survival training exercise with 25 other people. Everyone was told to leave their money, credit cards, and cell phones at home. It is day 4 and you would like a Snickers Bar. You have an extra Twinkie that you would like to give to someone in exchange for a Snickers Bar. One person out of the 25 in your group has a Snickers Bar. That person wants to give someone his Snickers bar in exchange for a Hostess Cupcake. You do not have a Hostess cupcake. You are unable to obtain your Snickers bar. Why? a.There is no exact coincidence of wants between you and the holder of the Snickers bar. b.There is no money available in the training exercise. c. Bartering for food never works. d. a and b are both reasons why you cannot trade for your desired Snickers bar. e.All of the above.

d

Which of the following is NOT true for the United States? a.Total, aggregate household income has increased dramatically since 1940. b.Total population has increased dramatically since 1940. c.Real median household income is higher in 2017 than at any time in the past. d.All income quintiles have seen roughly equal increases in their real median incomes since 1999. e.None of the above statements are true.

d

Based on the definitions used by the US Census Bureau: a. There are probably more families than households in the US. b. There are probably more households than families in the US. c. The number of households always exactly equals the number of families; they are exactly the same thing. d. None of the above

a

If South Africa has a Gini Index of 62.5 and Egypt has a Gini index of 30.8, which country will have the most "bowed out" Lorenz curve? (The farthest from the base line of reference.) a. South Africa b. Egypt c. Unable to determine

a

If household income from 1990 was NOT adjusted for inflation (i.e. not converted to 2017 dollars), reported 1990 income would be: a. Less than the inflation-adjusted income b. Equal to the inflation-adjusted income c. Greater than the inflation adjusted income. d. Unable to determine.

a

In the United States, from where do most people receive most of their income? a. From working (paychecks; a nation of workers) b. From rent collected on assets people own (a nation of landlords) c. From dividends received from stocks owned by individuals (a nation of shareholders) d. From transfer payments received from government assistance programs e. Roughly equal amounts are received from each of the above.

a

Suppose you earn $200,000 a year. Your cousin Beth earns $30,000 a year. You both work for the same company. You receive a 5% raise. Your cousin receives a 10% raise. Should your cousin Beth feel sorry for you because your dollar amount of income did not increase as much as her dollar amount of income increase? a.She should feel sorry for you: her dollar amount of income increase was greater than yours. b.She should not feel sorry for you: her dollar amount of income increase was less than yours.

a

According to the Circular flow model, at the end of the day when the markets have closed, if the markets are operating efficiently, the factor market and the goods market should: a. Have roughly equal amounts of resources and goods and services b. They should be empty: both markets should have "cleared." c. None of the above.

b

Which of the following statements regarding the "World Happiness Index" report for 2018 are true? a.The United States is consistently ranked among the top 10 happiest countries, and has been for at least the past 5 years. b .There is a strong correlation between immigrant happiness and country happiness. c.To be among the top ten happiest countries, you must also be among the ten richest countries. d.All else equal, countries with a very diverse society (many different cultural groups due to immigration) are happier than countries with a more homogenous society. e.All of the above are true.

b

Between 1967 and 2017, the gap between the top 5% of household incomes and the bottom 20% of household incomes has: a. Narrowed; the gap has become smaller b. Stayed constant c. Become wider, especially since the early 1990's

c

The Gini index for the country Anchovy is 2. The Gini index for country Bass is 78. You want to live in the country where you will receive the most absolute, total amount of income if you are among the richest 20% of the households. Which country should you choose? a.Anchovy b.Bass c. Unable to determine.

c

The gini index for the US in the early 1990's compared to today (the most recent gini index from the in class exercise) shows: a.Income distribution became more equitable between the early 1990's and today b.Income distribution has remained at a constant level of equitability between the early 1990's and today c.Income distribution became less equitable between the early 1990's and today

c

Which of the following is necessary for a market economic system to operate? (Circular flow) a.Lawyers b.CPA's c.Money d.Economists e.Mathematicians

c

n the United States, real Median family income: a.Decreased between 1985 and 2017 b.Remained unchanged between 1985 and 2016 c. Fluctuated between 1985 and 2017, with 2017 being the highest average to date. (using 2017 dollars to adjust for inflation) d. Steadily increased between 1985 and 2017

c

From the income distribution exercise, which of the following quintiles earned more real income in 2017 than at any time in the past? a. bottom quintile b. Second quintile c. Third quintile d. Fifth quintile e. Both c and d

e

If you are constructing a Lorenz curve to determine the "equitability" of height distributions in a kindergarten class, you would need to: a. List everyone's height from the shortest up to the tallest b. Measure the cumulative percent of the total height of the class on the vertical (y) axis c. Measure the cumulative percent of the total number of students on the horizontal (x) axis. d. Have both the y and the x axis start at 0 and end at 100% e. All of the above

e

The real median income for the bottom quintile of household incomes is a.higher in 2017 than at any time in the past b.lower in 2017 than at any time in the past c.Higher in 2017 than any time since the 2010 end of the great recession d.Still not as high in 2017 compared to the 1999 real median income "peak"for this quintile. e.BOTH c and d.

e

Which of the following represent advantages of using household income data? a.Income is a relatively objective measurement of household welfare. b.The data is consistent over time. c.The data is consistent between countries d.The data is available going back for a number of years. e.All of the above.

e