A change in the price of important inputs will change the quantity supplied but will not shift the supply curve.
Answer the following statement true (T) or false (F)
False
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The task of deciding which consumer gets each of the goods produced in a free-market economy is solved by
A. the price system. B. the industries that produce the goods. C. the central planners. D. citizens with political power.
In an economy with lump-sum taxes and no international sector, assume that the aggregate supply curve is horizontal. If the marginal propensity to consume is equal to 0.8, which of the following will necessarily be true?
(a) The average propensity to consume will be less than the marginal propensity to consume (b) The government expenditure multiplier will be equal to 5 (c) A $10 increase in consumption spending will bring about an $80 increase in disposable income (d) Wealth will tend to accumulate in the hands of a few people (e) The economy will be running a deficit, since consumption expenditure exceed personal saving
Which of the following explains why the demand for money curve has an inverse relationship between the interest rates and the quantity of money demanded?
A. As the interest rate rises, the opportunity cost of holding money rises, and people respond by converting cash or checking account balances into interest-bearing financial investments. B. As the interest rate rises, people find it advantageous to borrow money, which increases the quantity of money demanded. C. As the interest rate falls, the opportunity cost of holding money rises, and people respond by converting cash or checking account balances into interest-bearing financial investments. D. As the interest rate rises, the demand for money curve shifts outward to the right.
Minimum wage laws tend to make the price level more flexible rather than less flexible.
Answer the following statement true (T) or false (F)