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