Economists who focus on long-run growth suggest that the government could lower taxes on labor income in order to increase employment
a. True
b. False
A
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In order to encourage domestic saving, it is necessary to have:
a. a laissez faire economy. b. a balanced fiscal budget. c. a large number of government subsidies. d. a stable system of property rights. e. a highly developed banking system.
The market wage could be higher than the equilibrium wage if a worker
a. belongs to a labor union. b. is covered by a minimum-wage law. c. is paid an efficiency wage. d. All of the above are correct.
In the ISLM framework, an expansionary monetary policy causes aggregate output to ________ and the interest rate to ________, everything else held constant
A) increase; increase B) increase; decrease C) decrease; decrease D) decrease; increase
Assume that the expectation of declining housing prices cause households to reduce their demand for new houses and the financing that accompanies it. If the nation has highly mobile international capital markets and a flexible exchange rate system, what happens to the real risk-free interest rate and real GDP in the context of the Three-Sector-Model?
a. The real risk-free interest rate falls, and real GDP rises. b. The real risk-free interest rate and real GDP remain the same. c. The real risk-free interest rate rises, and real GDP falls. d. The real risk-free interest rate falls, and real GDP remains the same. e. The real risk-free interest rate falls, and real GDP falls.