What do the Lorenz curves for wealth and income in the United States look like? Which is closer to the line of equality?
What will be an ideal response?
Both the Lorenz curve for wealth and the Lorenz curve for income are bowed outward from the line of equality because neither wealth nor income is equally distributed. The Lorenz curve for income is closer to line of equality than the Lorenz curve for wealth because income, while unequally distributed, is more equally distributed than is wealth.
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The increase in the unemployment rate during a recession is associated with which type of unemployment?
A. Structural unemployment B. Cyclical unemployment C. Nominal unemployment D. Frictional unemployment
Starting from long-run equilibrium, a large decrease in government purchases will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. expansionary; lower; potential B. expansionary; higher; potential C. recessionary; lower; potential D. recessionary; lower; lower