If the income effect outweighs the price effect of a wage increase, the labor-supply curve will:
A. slope upward.
B. slope downward.
C. be perfectly flat.
D. be perfectly horizontal.
B. slope downward.
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Suppose we are working with the simplest possible Keynesian-cross multiplier, but with the permanent-income hypothesis figured in. If k = 0.88,
and j = 0.25, the multiplier of a $1 change in government spending goes from ________ in the short run to ________ in the long run. A) 8.33, 1.28 B) 1.28, 8.33 C) 8.33, 4.00 D) 1.13, 4.00 E) 4.54, 8.33
The U.S. government was given the power to tax income in the
A. Early 1900s. B. Early 1800s. C. Late 1800s. D. Early 1700s.
Price ceilings set below the equilibrium create:
A. externalities. B. unemployment. C. shortages. D. surpluses.
The prime interest rate:
A. affects investment spending while the federal funds rate affects consumption spending. B. affects consumption spending while the federal funds rate affects investment spending. C. has no effect on exchange rates and net exports. D. affects investment spending while the federal funds rate affects overnight borrowing of bank reserves.