Suppose a major computer virus struck the nation's computers and all hard drives were erased. What would happen in the labor market?
a. The real wage would increase and so would employment.
b. The real wage would not change, but employment would decrease.
c. The real wage would increase and employment would decrease.
d. The real wage would decrease and so would employment.
e. The real wage would decrease and employment would increase.
D
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When we keep part of our wealth in a bank checking account, we are using money as a ________ because ________
A) store of value; we are holding the money to exchange for goods at a later time B) medium of exchange; we are holding the money to gain interest earned C) barter token; we are holding the money to exchange for goods at a later time D) unit of account; we are holding the money to exchange for goods at a later time E) unit of currency; we have agreed upon the value of the money with bank
Your roommate argues that he can think of no better situation than living in a deflationary economy, as prices of goods and services would continuously fall. You disagree and argue that during a deflation, people can be made worse off because
A) the purchasing power of the currency would decrease. B) the value of the real interest rate will drop below the nominal interest rate. C) borrowers will have to pay increasing amounts in real terms over time. D) the purchasing power of people's incomes would increase.
Federal Reserve Board Chairmen Paul Volcker, Alan Greenspan, and Ben Bernanke all have focused on which of the following as their main goal of monetary policy?
A) economic growth B) stability of financial markets C) high employment D) price stability
A typical market supply curve
a. is identical to the firm's marginal cost curve b. does not reflect any external cost borne by third parties c. is identical to the firm's marginal revenue curve d. reflects external benefits enjoyed by third parties e. is perfectly inelastic