If a minimum wage is set above the equilibrium wage rate, employment
A) will increase.
B) will not change.
C) will decrease.
D) may increase, decrease or not change depending on how the supply of labor is affected by the minimum wage.
C
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Bank reserves increase when the Treasury finances an expenditure through
A) taxation. B) borrowing from the non-bank public. C) borrowing from the banking system. D) borrowing from the Fed.
An increase in government spending by $100 would, if the MPC = 0.90, result in an increase in real GDP by:
a. $1,000. b. $9,000. c. $900. d. $190. e. inadequate information is given.
If consumption expenditures are $200 billion, total investment is $50 billion, government purchases are $40 billion, exports are $45 billion, imports are $40 billion, aggregate expenditures must be:
a. $275 billion. b. $295 billion. c. $320 billion. d. $395 billion.
The expected price level is important because
a. it is the equilibrium price level in the short run b. it determines the actual price level in the short run c. it determines the actual price level in the long run d. firms and resource owners make long-term agreements based on the expected price level