Individuals with more experience tend to earn more than individuals with less experience. This is because
A. it is only fair that a more-experienced worker be paid more than a less-experienced worker.
B. experience on the job increases an individual's human capital.
C. the government requires that more-experienced workers be paid more than less-experienced workers.
D. experience is a compensating differential.
Answer: B
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An increase in aggregate demand results in
A) a higher unemployment rate and a lower price level. B) a decrease in real GDP and a decrease in the price level. C) a lower unemployment rate and a lower price level. D) an increase in real GDP and a decrease in the price level. E) a lower unemployment rate and a higher price level.
For the Jones household it has been estimated that for every ten degrees increase in the outdoor temperature the consumption of ice tea increases by 5 glasses
What type of relationship exists between temperature change and the consumption of ice tea? A) negative relationship B) positive relationship C) no relationship D) maximum relationship
Assume that you are a policy adviser who believes that money demand is highly interest-sensitive but investment is not. Asked your advice on how to pull the economy out of a recession, you are likely to emphasize
A) contractionary monetary policy. B) expansionary monetary policy. C) contractionary fiscal policy. D) expansionary fiscal policy.
Improvements in labor productivity
A) affect the level of wages, but do not affect the rate of economic growth. B) affect the level of profit, but do not affect the rate of economic growth. C) hinder economic growth, because they cause unemployment. D) contribute to economic growth.