Why are economic growth and saving related?
What will be an ideal response?
To consume more in the future less must be consumed today. That is, saving is necessary for investment to occur, and investment is necessary for economic growth to occur.
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The graph shows the labor market for painters. The lower the wage rate, the ________ is the quantity of painters that firms demand and the ________ is the quantity of painters that households are willing to supply
A) greater; smaller B) greater; greater C) smaller; greater D) smaller; smaller E) None of the above answers is correct because both the demand and supply curves will shift in response to the change in the wage rate.
When the Fed increases the money supply,
A) the interest rate rises and this stimulates consumption spending. B) the interest rate falls and this stimulates investment spending. C) the interest rate rises and this stimulates investment spending. D) people spend less because they have more money.
In order to make oil profits as large as possible, OPEC meets to set oil production quotas for its members. OPEC is best classified as a:
a. monopoly. b. cartel. c. kinked demand industry. d. price-leadership industry.
Which of the following is not an example of Pareto optimality?
A. The city council approves a tax increase on all residents in order to make repairs to one remote residential street. B. The Beauregard twins eagerly switch cell phone cases with each other. C. Despite complaints from members, Harmony Industries builds a sewage treatment plant next to a country club. D. Timmy tricks Jonathan into trading a genuine Brooks Robinson baseball card for a fake Pete Rose baseball card.