Absolute poverty measures vary from country to country. For example, in 2015, the poverty line in the United States for a family of four with two children
was an annual income of $24,250 but economists often use a much lower threshold income of $1 per day when calculating the rate of poverty in poor countries. How is this absolute poverty measured?
A) by comparing the amount of goods and services that a household's income can purchase in one country to the amount of goods and services that a household's income can purchase in another country of comparable living standard
B) by comparing the amount of goods and services that a household's income can purchase to an objective measure of the amount of income needed to sustain a certain predetermined standard of living
C) by comparing the percentage of households living below the poverty line to the total population
D) by comparing a household's income to the income required to maintain the average standard of living in a society at a particular time
B
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When bankers hold excess reserves:
A. The size of the monetary multiplier increases B. The money-creating potential of the banking system increases C. The money-creating potential of the banking system decreases D. There is no change in the money-creating potential of the banking system
Which of the factors listed below might cause the Ricardian equivalence proposition to be violated?
A. There may be international capital inflows and outflows. B. There may be constraints on the level of government taxation. C. Consumers may not understand that an increase in government borrowing today is likely to lead to higher future taxes. D. There may be constraints on the level of government spending.