The costs of the process of bargaining to reach a mutually satisfactory agreement are called negotiation costs
Indicate whether the statement is true or false
TRUE
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Keynes called the money people hold in order to pay unforeseen or unexpected expenses the:
A. transactions demand for holding money. B. precautionary demand for holding money. C. speculative demand for holding money. D. store of value demand for holding money.
An example of an implicit cost is
A. a business using a building owned by the business owner. B. the payment of interest on a bond. C. payment of a salary to a CEO of a company. D. a payment to a resource owner.
Consumer surplus
A. is the difference between the minimum price producers are willing to accept for a product and the higher equilibrium price. B. is the difference between the maximum price consumers are willing to pay for a product and the minimum price producers are willing to accept. C. is the difference between the maximum price consumers are willing to pay for a product and the lower equilibrium price. D. rises as equilibrium price rises.
Both Keynesians and supply-siders believe that tax cuts
a. will increase income by increasing aggregate supply. b. will increase income by increasing aggregate demand. c. will increase income but for different reasons. d. will increase income in the Keynesian model but decrease income in the Supply-side model.