Which of the Following Statements Is Not Correct

question 478

Multiple Choice

Which of the following statements is not correct?

• A)The percentage of the population that suffers from long-term poverty is far smaller than the percentage of the population that suffers from short-term poverty because there is a high level of economic mobility in the United States.
• B)Permanent income is a better measure of a family's ability to buy the necessities of life than is transitory income.
• C)The economic life cycle theory explains why gifts of goods and services reduce poverty for the very young and the very old.
• D)Because people can borrow and save to smooth out changes in income, their standard of living in any one year depends more on lifetime income than on a particular year's income.

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Definitions:

Domestic Quantity Demanded

The total amount of a good or service that consumers in a particular country want to buy at given prices.

Tariff

A tax imposed on imported goods and services, intended to increase the cost of imported items and protect domestic industries from foreign competition.

Price

The fund requirement for the acquisition of a good or service.

Free Trade

Global trade allowed to proceed without any tariffs, quotas, or limitations, following its natural flow.