Homework answers / question archive / STATEMENT TRUE or FALSE? (3 points each) EXPLANATION (3 points each) 1

STATEMENT TRUE or FALSE? (3 points each) EXPLANATION (3 points each) 1

Economics

Share With

STATEMENT TRUE or FALSE? (3 points each) EXPLANATION (3 points each) 1. One normative reason to be concerned about inequality is that a high level of inequality may reduce the growth rate of the economy because people at the bottom of the income distribution will invest less because they feel they will never catch up to those at the top. 2. The salary paid by the City of Davis to a Davis police officer are included in US GDP, but the salary paid by the Golden State Warriors (a professional basketball team) to Steph Curry (a player on the team) is not included in US GDP 3. The difference in income per capita between poor versus rich countries tends to be smaller when we convert incomes to USD using the Purchasing Power Parity Exchange rate compared to using the Official Exchange rate 4. A regressive transfer between two non- poor individuals will always leave both the Poverty Head Count Index and the Poverty Gap Index unchanged. 5. A regressive transfer between two individuals will always use a Kuznets Ratio to increase