Suppose you were to hear a politician defend the minimum wage on the grounds that it would not cause that much unemployment because firms have to hire a certain number of workers, you would know this person to be relying on the ________ argument.
A. consumer and producer surplus
B. elasticity
C. macroeconomic
D. work effort
Answer: B
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The Haig-Simons definition of income includes
A. employer pension contributions and insurance purchases. B. transfer payments. C. income in-kind. D. all of these answer options are correct.
If a country pegs its currency to a foreign currency, it no longer has the ability to use monetary policy to stabilize the economy because:
A. it no longer has a central bank. B. banks will begin to hold 100 percent of their deposits in reserves. C. monetary policy must be used to keep the exchange rate's market equilibrium value at its official value. D. it must eliminate its currency from circulation and replace it with the foreign currency.
If the quantity supplied of money is less than the quantity demanded of money, people will ________ bonds which will cause bond prices to ________ and the nominal interest rate to ________ until the quantity demanded and quantity supplied of money are equal.
A. buy; fall; rise B. sell; fall; rise C. sell; rise; fall D. sell; fall; fall
Purchasing power parity is used to estimate equilibrium:
A. inflation rates. B. exchange rates. C. price levels. D. interest rates.