Darin Grows and Sells Marijuana to Jennifer

question 224

Multiple Choice

Darin grows and sells marijuana to Jennifer. Thomas is an organic farmer who sells broccoli to Jennifer. Marijuana is an illegal good and broccoli is a legal good. Assume that if Jennifer marries either, they give her what they use to sell her. Which of the following statements is consistent with the way GDP is computed?

• A) GDP will fall if Jennifer marries either Darin or Thomas.
• B) GDP will fall if Jennifer marries Darin but not if she marries Thomas.
• C) GDP will fall if Jennifer marries Thomas but not if she marries Darin.
• D) GDP remains the same whether Jennifer marries Darin or Thomas.

Identify various forms of government assistance and their characteristics.

Comprehend income mobility and its effects on income inequality.

Analyze the relationship between taxes, transfers, and income distribution through the Gini ratio.

Explain the role of discrimination, education, and training on income distribution.

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Definitions:

Modified Duration

A measure that estimates the price sensitivity of a bond to a one percent change in interest rates, adjusting for the changing yield to maturity.

Yield To Maturity

The total return anticipated on a bond if the bond is held until it matures.

Duration

A measure of the sensitivity of the price of a bond or other fixed-income investment to changes in interest rates, typically expressed in years.

Basis Points

Basis Points are a unit of measure used in finance to describe the percentage change in the value or rate of a financial instrument, with one basis point being 1/100th of 1%.