The wealth effect says that if there is an increase in the price level, you will:
A. experience some reduction in your level of wealth as a result.
B. experience some increase in your level of wealth as a result.
C. typically spend more on all goods and services as a result.
D. typically shift your spending to assets from consumption goods.
A. experience some reduction in your level of wealth as a result.
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Compensating differentials are
A) non-monetary benefits from being employed, such as health-care benefits. B) higher wages that compensate the more experienced workers in a field. C) wages paid to workers where the supply of labor is great relative to demand. D) higher wages that compensate workers for unpleasant aspects of a job.
Government saving refers to ________
A) tax revenues minus transfers minus government purchases B) tax revenues plus transfers minus government consumption C) the saving rate times transfers D) national plus private saving E) none of the above
The accompanying figure shows the production possibilities curve for the island of Genovia:
The opportunity cost of producing one ton of agricultural products in Genovia is:
A. 1/5 of a car. B. 1/50 of a car. C. 1,000 cars. D. 1 car.
Which of the following will not cause an increase in the present value of a sequence of payments?
A) a reduction in the current interest rate B) a reduction in expected future interest rates C) an increase in a future expected payment D) none of the above