A. the resulting distribution of income is likely to be too equal to maintain production incentives. B. income from inherited property is inconsistent with the theory. C. purely competitive conditions characterize most resource markets. D. it
fails to recognize that resource demand is derived from product demand.
A. earnings reflect pricing power rather than marginal revenue product.
B. small differences in talent get magnified into huge differences in pay.
C. entry and exit rarely occur.
D. product demand is typically highly elastic.
Answer: B
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To decrease the money supply using the reserve requirements, what would the Fed typically do?
A) let each bank get less currency from the Treasury B) raise the reserve requirement for banks C) reduce the reserve requirement for banks D) make each bank voluntarily set its own reserve levels
Abnormal net income is similar to economic profit
Indicate whether the statement is true or false
Which will cause a larger short-run increase in prices: an anticipated or unanticipated increase in aggregate demand? Will they cause the same increase in prices in the long run?
Use the information below to explain adjustments that move the economy to a long-run equilibrium. Assume that firms and workers have adaptive expectations
The current unemployment rate = 7%. The natural rate of unemployment = 5.5%. Last year's inflation rate = 5%. This year's inflation rate = 4%.