Minimum wages are examples of
A. a price floor.
B. government increasing the demand for certain products.
C. the rationing function of prices not working.
D. a price ceiling.
Answer: A
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The tax multiplier
A) is negative. B) is a measure of how much taxes will fall when income is falling. C) is larger in absolute value as compared to the government spending multiplier. D) is always less than one.
The most common form of "forced savings" in the U.S. is:
A. Medicare. B. unemployment insurance. C. Social Security. D. FICA.
Suppose a plaintiff hires a lawyer to represent her in a court case. The lawyer will be paid a fixed fee. Under this contract,
A) production efficiency is achieved. B) the client bears all of the risk. C) the lawyer has an incentive to lie about his hours worked. D) All of the above.
Figure 19-2
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Of the graphs in Figure 19-2, which one shows the effects on the exchange rate of an expansion in Japan?
A. 1 B. 2 C. 3 D. 4