What would be the consequence for the Lorenz curve is rich people use their resources more efficiently than poor people?
What will be an ideal response?
The Lorenz curve may understate the actual amount of inequality if richer households are able to use income more efficiently than lower income households or vice versa. Alternatively it may be that measured inequality may be the result of more or less efficient use of household incomes.
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According to proponents of the interest-rate-based monetary policy transmission mechanism, any increase in the money supply
A) causes velocity to increase, and so in the short run nominal Gross Domestic Product (GDP) must increase. B) will increase Gross Domestic Product (GDP) only if interest rates fall and investment is sensitive to decreasing interest rates. C) is effective in increasing Gross Domestic Product (GDP) only if it causes an outward shift of the aggregate supply curve. D) will move the economy from the "liquidity trap" during times of recession if interest rates fall enough to stimulate private investment.
The slope of the output per worker function is equal to the
A) marginal product of capital. B) marginal product of labor. C) savings rate. D) growth rate of the population.