When the price of labor increases, the substitution effect will ________ the quantity of labor demanded and the output effect will ________ it.
A. increase; decrease
B. increase; increase
C. decrease; decrease
D. decrease; increase
Answer: C
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Which of the following terms describes the situation in which all resources are able to move to to highest-valued uses via voluntary exchange?
A) government intervention B) a market failure C) economic efficiency D) an externality
The program that was created to provide rebates of Social Security taxes to low-income workers is
A) Supplemental Security Income. B) food stamps. C) Earned Income Tax Credit program. D) TANF.
The quantity theory of money along with the assumption of a constant velocity can explain which of the following?
A. At a given level of money growth, the higher the level of real growth the lower the level of inflation will be. B. At a given level of money growth, the higher the level of real growth the higher the level of inflation will be. C. If real growth equals money growth, the price level is falling. D. If real growth is higher than money growth, the price level must be rising.
When the IMF provides loans to developing countries, it often requires these countries to adopt:
A. a contractionary fiscal policy and an expansionary monetary policy. B. contractionary monetary and fiscal policies. C. expansionary monetary and fiscal policies. D. a contractionary monetary policy and an expansionary fiscal policy.