Which of the following statements is consistent with the theory of liquidity preference?
What will be an ideal response?
When the Federal Reserve Board of Govenors increases the money supply faster than usual, interest rates fall.
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Suppose at the going wage rate of $20 per hour, firms can hire as many hours of janitorial services as they desire. If any firm tries to lower the wage rate to $19, it will not be able to hire any janitor
What does this indicate about the supply curve for janitorial services? A) Supply is relatively inelastic. B) Supply is perfectly elastic. C) Supply is unit-elastic. D) Supply is perfectly inelastic.
The marginal revenue curve for a monopolist is always below the demand curve.
Answer the following statement true (T) or false (F)
An increase in the marginal income tax rate is likely to:
A. decrease the quantity of labor supplied. B. increase the quantity of labor supplied. C. decrease the quantity of labor demanded. D. increase the quantity of labor demanded.
If the price of good A increases from $15 to $20 per unit and quantity demanded falls from 150 to 100 units, then by using the method of average values, we can calculate the absolute price elasticity of demand to be
A) 2.6. B) 0.75. C) 1.4. D) 2.4.