Which of the following statements is a normative as opposed to a positive economic statement?
A) Consumer spending helps to create jobs.
B) If the price of gasoline goes up, people buy less gasoline.
C) Labor unions should be allowed to organize in every industry.
D) Government intervention in markets is common in many countries.
Answer: C
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How is a firm's labor demand affected during a recession if wages are downwardly rigid?
What will be an ideal response?
The interest rate that the Fed charges when it makes a last resort loan is the ________ rate
A) discount B) short-term C) reserve D) federal funds
A monopolist in the radio industry has two radio-making plants. The marginal cost of radio production by Plant A is $4Q (where Q is the number of radios produced) and the marginal cost of radio production by Plant B is always $16 . If the demand curve for radios is downward sloping, the monopolist will
a. never produce radios at Plant A. b. always produce four times as many radios at Plant B as at A. c. never produce more than four radios at Plant A. d. produce radios at Plant A only as a last resort.
According to the classical dichotomy, when the money supply doubles, which of the following also doubles?
a. the price level and nominal wages b. the price level, but not the nominal wage c. the nominal wage, but not the price level d. neither the nominal wage nor the price level