According to the classical system, saving is a function of
a. income.
b. the real interest rate.
c. the real wage.
d. the profitability of firms.
e. all of the above.
B
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The economy has gone into a recession. You have majored in computer science and, because of the recession, have difficulty in finding a job. Should you go back to school and get a second major?
A) No, the recession will have no impact on my ability to get a job or my future income. B) Yes, the recession will lower income in my field permanently. C) No, the recession will most likely be short-lived and I can get a job after it is over. D) Yes, the recession will ensure that you will never find a job as a programmer.
Equivalent variation is a method employed to measure excess burden. Comment on why a method such as compensating variation would not be appropriate for this analysis.
What will be an ideal response?
If there is a decrease in world taxes ________
A) domestic investment would fall B) net exports would increase C) domestic interest rates would go up D) all of the above E) none of the above
Suppose the downward sloping labor demand curve shifts rightward in a labor market with a single employer (monopsony). What happens to the marginal expenditure curve?
A) Shifts left B) Shifts right C) Remains the same D) We do not have enough information to answer this question.