When the benefit of another hour of work is greater than the opportunity cost, we would expect the worker to work:
A. another hour.
B. exactly that amount.
C. an hour less.
D. Cannot be determined without more information.
Answer: A
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To achieve long-run equilibrium in an economy with a recessionary gap, without the use of stabilization policy, the inflation rate must:
A. not change. B. increase. C. decrease. D. either increase or decrease depending on the relative shifts of AD and AS.
According to the Application, one factor which was responsible for roughly one-fifth of hybrid vehicles purchased in 2007 was a federal subsidy of up to $3,400 per hybrid vehicle
The increase in sales due to this subsidy is an example of which element of the economic way of thinking? A) responding to incentives B) using assumptions to simplify C) thinking at the margin D) isolating variables
The current exchange rate system has which of the following characteristics?
A) The countries of the European Union have adopted the gold standard. B) Several developing countries in Asia have adopted the Bretton Woods system. C) The United States allows the dollar to float against other major currencies. D) The current global foreign exchange system is a fixed system. E) All developing countries allow their currencies to float against the dollar and other major currencies.
The Fisher equation implies ________
A) the nominal interest rate equals the real rate of inflation plus expected inflation B) the real interest rate equals expected inflation C) expected inflation equals current inflation D) the rate of inflation equals the real minus the nominal rates of interest E) none of the above