Which of the following is an appropriate fiscal policy prescription that addresses the inflation that occurs when the economy is above potential GDP?
a. Decreasing taxes to protect consumers from the effects of inflation
b. Increasing taxes to reduce aggregate demand
c. Increasing government spending to provide some of the goods that consumers can no longer afford at the higher prices
d. Decreasing government spending to cause a decrease in the demand for money
e. Increasing transfer payments to poor people, who are hurt the most by the inflation
b
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Explain why a monopsony's marginal cost of labor is greater than the wage rate
What will be an ideal response?
A technological breakthrough in using photons for computers will increase the productivity of those working with computers a hundredfold. You would expect this breakthrough to shift the
A) marginal product of labor curve up and to the right, raising the quantity of labor demanded at any given real wage. B) marginal product of labor curve down and to the left, reducing the quantity of labor demanded at any given real wage. C) labor supply curve up, reducing the quantity of labor demanded at any given real wage. D) labor supply curve down, raising the quantity of labor demanded at any given real wage.
In laboratory experiments, researchers have found that the behavior of Proposers and Responders in the ultimatum game is consistent with people:
A. acting in their own narrow self-interest. B. valuing fairness. C. not understanding the game. D. behaving irrationally.
If a farmer earns a larger profit than the "normal profit" by producing a special type of vegetable that becomes popular,
A. the farm's owners are likely to withdraw from the industry in order to retire early. B. the firm will continue to earn its "normal profits" far into the future. C. other farmers are likely to plant the same vegetable, pushing up the prevailing market price. D. other farmers are likely to plant the same vegetable, pushing down the prevailing market price.