During the time period represented in Figure 7.3, the purchasing power of the average workerÂ
A. Decreased because nominal income decreased.
B. Stay the same because COLAs reduced purchasing power.
C. Decreased because real income decreased.
D. Increased because nominal wages increased.
Answer: C
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Fill in the blank: According to your textbook, "Fiscal policy is simply ________."
A) budget policy B) monetary policy under a different name C) price policy D) wage policy E) stupid
Using the Lorenz curve, the degree of income inequality is measured by
a. The line connecting all points for which a given percentage of families receives exactly the cumulative percentage of income b. the distance of the Lorenz curve from the line of perfect equality c. the flat diagonal line that applies to a perfectly elastic demand curve d. the number of times the Lorenz curve crosses the line of perfect equality e. is derived by dividing the number of people below the poverty line by the total population