Question

1.

a. The Lorenz curve is a model that shows

	a.	the quantity demanded in a market at different prices.
	b.	the cumulative shares of income earned by different percentiles of the population.
	c.	the maximum combinations of two goods that can be produced given a certain quantity of resources and state of technology.
	d.	all of the combinations of two goods that can be achieved through trade.
	e.	none of the above

b. If a country has a surplus in its current account

	a.	then it must have a deficit in its capital and financial accounts.
	b.	then its net exports are positive.
	c.	then it is selling more to the rest of the world than it is buying from the rest of the world.
	d.	then the country has a trade surplus.
	e.	all of the above.

c. Due to double-entry bookkeeping, the overall balance of payments for a country will always be positive.

True

False

d) Which of the following is not included in the current account?

	a.	flows of goods between countries
	b.	flows of services between countries
	c.	flows of financial assets between countries
	d.	income earned by foreigners in the United States
	e.	income earned by Americans abroad

Answer 1

1.a) Ans: b) the cumulative shares of income earned by different percentiles of the population.

Explanation:

The Lorenz curve is used to measure the inequalities of income distribution.

b) Ans: e) all of the above.

Explanation:

When a country has a surplus in its current account then it leads positive net exports , trade surplus. It must have a deficit in its capital and financial accounts.

c) Ans: True

Explanation:

The balance of payment always balances.

d) Ans: c) flows of financial assets between countries.