Which of the following represents a problem in measuring inequality?
a. Measurements of income distributions typically include in-kind transfers, which distort the measure of inequality.
b. A normal life-cycle pattern causes inequality in the income distribution but may not reflect inequality in living standards.
c. Transitory income is a better measure of inequality than permanent income.
d. Both a and b are correct.
b
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The word "final" in the definition of GDP refers to
A) not counting intermediate goods or services. B) the time period when production took place. C) valuing production at market prices. D) counting the intermediate goods and services used to produce GDP.
If the theory behind an economic model fits the data poorly, you would probably want to
A) use the theory to predict what would happen if the economic setting or economic policies change. B) start from scratch with a new model. C) enrich the model with additional assumptions. D) restate the research question.