Suppose the market wage for cashiers increases from $7 per hour to $9 per hour. As a result, Pat, who is a cashier, now works five more hours per week. On the other hand Chris, who is also a cashier, now works five fewer hours per week. Chris's behavior illustrates the ________ effect of a wage increase.
A. demand
B. supply
C. substitution
D. income
Answer: D
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The sum of the marginal propensity to consume and the marginal propensity to save is always equal to
A) zero. B) 0.5. C) 1. D) 100.
If you go into a bank which faces a 10% required reserve ratio and borrow $1,000, the bank will ____ your checking account at the bank
a. add $1,000 to b. subtract $1,000 from c. add $5,000 to d. subtract $5,000 from
A small country imports T-shirts. With free trade at a world price of $10, domestic production is 10 million T-shirts and domestic consumption is 42 million T-shirts. The country's government now decides to impose a quota to limit T-shirt imports to 20 million per year. With the import quota in place, the domestic price rises to $12 per T-shirt and domestic production rises to 15 million T-shirts per year. The quota on T-shirts causes domestic producers to
A. gain $25 million. B. gain $30 million. C. gain $5 million. D. lose $5 million.
Which of the following is the definition for the real supply of money?
A) The stock of money measured in terms of goods, not dollars. B) The stock of high powered money only. C) The real value of currency in circulation only. D) The actual quantity of money, rather than the officially reported quantity. E) The ratio of the real GDP to the nominal money supply.