The benchmark default-free interest rate of the financial system is generally considered to be:
A) the federal funds rate
B) the interest rate on the 10-year Treasury note
C) the discount rate
D) the 30-year fixed rate mortgage
B
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If a person supplies fewer hours of labor in response to a wage increase, then
A) the substitution effect is greater than the income effect. B) the income effect is greater than the substitution effect. C) the income effect equals the substitution effect. D) the person is not maximizing utility.
Use the figure below to answer the following question.
If a price floor in this market is set at P2, then
A. government revenue equals area d. B. government revenue equals area b. C. government does not raise revenue. D. government revenue equals the distance between P1 and P2.
The Prime Minister of Richlandia hires you as an economic consultant. He is concerned that the output level in Richlandia is too low and that this will cause unemployment to rise. He feels that it is necessary to increase output by $20 billion. He tells you that the MPC in Richlandia is 0.75. Which of the following would be the best advice to give to the Richlandian Prime Minister?
A. Increase government purchases in Richlandia by $5 billion. B. Reduce taxes in Richlandia by $4 billion. C. Increase government purchases in Richlandia by $15 billion. D. Reduce taxes in Richlandia by $10 billion.
Refer to the information provided in Table 3.1 below to answer the question(s) that follow. Table 3.1Price per PizzaQuantity Demanded (Pizzas per Month)Quantity Supplied (Pizzas per Month)$31,200 600 61,000 700 9 800 80012 600 90015 4001,000Refer to Table 3.1. In this market there will be an excess demand of 300 pizzas at a price of
A. $6. B. $9. C. $12. D. $15.