Based on the answer above, the price for bus rides _____________ and the quantity demanded for rides ____________
a. Decreases; decreases
b. Decreases; increases
c. Decreases; uncertain
d. Increases; uncertain
c
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Suppose a government tried to mandate a real wage above the equilibrium real wage. Assuming that factor markets are otherwise free and competitive, explain why the higher real wage would fail to increase the share of labor income in national income
What will be an ideal response?
An example of a natural resource is:
A. Michael Jordan's athletic ability. B. Farmer Joe's farm fields. C. Bill Gates' revolutionary iPod. D. All of these are examples of natural resources.
Which of the following is not considered investment in the national income accounts? a. The purchase of a drill press by XYZ company
b. Construction of a new housing project. c. The accumulation of inventories on a grocer's shelves. d. The purchase of 1000 shares of IBM stock.
If the government accelerates money supply growth and enlarges the budget deficit to stimulate aggregate demand, the rational expectations hypothesis indicates that decision makers will
a. ignore the policy until it exerts an observable impact on prices, output, and employment. b. quickly take steps to adjust their decision making in light of the more expansionary policies. c. be fooled at the outset but eventually adjust their decision making in accordance with the change in policy. d. be unaware that this policy change has been implemented until a higher rate of inflation is observed.