An increase in the government's budget deficit ________ the real interest rate and ________ the equilibrium quantity of national saving.
A. increases; decreases
B. increases; increases
C. decreases; decreases
D. decreases; increases
Answer: A
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Voluntary exchange requires that there must be mutual gain.
Answer the following statement true (T) or false (F)
Which type of unemployment is most likely to fall as a result of government policies that stimulate aggregate demand?
a. frictional unemployment b. structural unemployment c. natural unemployment d. cyclical unemployment
When you see a commercial on TV asking you to "look for the union label," the union is trying to
A) increase worker productivity. B) increase the demand for nonunion goods. C) increase the demand for union goods. D) decrease the demand for nonunion goods.
A perfectly competitive firm does not try to raise its price above the market price because
A. its competitors would not permit it. B. this would be considered unethical price chiseling. C. its demand curve is inelastic, so total revenue will decline. D. it would not be able to sell its output.