Consider the economy described by the income distribution in Table 21-1. From this table, we can conclude that the poorest 60 percent of the population earns
A. 15 percent of the income.
B. 17 percent of the income.
C. 32 percent of the income.
D. 68 percent of the income.
Answer: C
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Because of the income effect, a higher wage rate
A) shifts the supply of labor curve leftward. B) shifts the supply of labor curve rightward. C) leads to a decrease in quantity of labor supplied. D) leads to an increase in quantity of labor supplied.
When drawn against the real interest rate, the output demand curve unambiguously shifts to the right if either or both of the following occur
A) an increase in current taxes and an increase in future taxes B) an increase in current taxes and a decrease in future taxes C) a decrease in current taxes and an increase in future taxes D) a decrease in current taxes and a decrease in future taxes
Given a price elasticity of demand of -0.33, a decrease in price will
A) reduce total revenue. B) increase total revenue. C) leave total revenue unchanged. D) decrease quantity.
What interest rate does a bank pay when it borrows reserves from the Fed?
a. The discount rate. b. The prime rate. c. The federal funds rate. d. The required reserve rate.