If the economy is in a short-run equilibrium above potential output, then
A. the unemployment rate is below the natural rate
B. there will be upward pressure on wages
C. as wages eventually change the short-run aggregate supply curve will shift up/left
D. all of the above
Answer: C. as wages eventually change the short-run aggregate supply curve will shift up/left
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A tax structure is called progressive when
A. the average tax rate on low-income groups exceeds the tax rate of high-income groups. B. the average tax rate decreases if income decreases. C. the average tax rate is constant, but the absolute amount of taxes paid increases with income increases. D. high-income groups pay more taxes absolutely than do low-income groups.
When Monica's Catering lowered the price of catered meals from $60 per person to $20 per person, the quantity demanded doubled from 500 meals to 1,000 meals
You can conclude that the demand for Monica's catered meals over the price range of $20 to $60 is A) upward sloping. B) unit elastic. C) elastic. D) inelastic.
The multiplier can be expressed as the ratio of the change in Y over the change in I.
Answer the following statement true (T) or false (F)
According to the life-cycle theory of consumption, people tend to ________ during their main working years.
A. consume more than they earn B. save C. accumulate negative wealth D. dissave