Answer the following statement(s) true (T) or false (F)
1. The difference between the earnings of a college graduate and an unskilled worker constitute the rent on human capital.
2. Positive externalities created by human capital provide one explanation of why firms do not move more capital to low-wage areas.
3. If most employers discriminate on the basis of race, then wage differentials between whites and blacks will certainly occur.
4. If there is discrimination, employers engage in it at a cost.
5. One reason that the extent of discrimination is difficult to measure is that workers sometimes choose to accept lower-paying jobs even though higher-paying jobs are available.
1. True
2. True
3. False
4. True
5. True
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The figure above illustrates the marginal benefit and marginal cost of different quantities of national defense. What is the political equilibrium if voters are well informed?
A) 0 units B) between 0 and 3 units C) 3 units D) 5 units
If the interest rate in the United States rises
A) investors increase their demand for dollars and the U.S. exchange rate appreciates. B) investors increase their demand for dollars and the U.S. exchange rate depreciates. C) investors decrease their demand for dollars and the U.S. exchange rate appreciates. D) investors decrease their demand for dollars and the U.S. exchange rate depreciates.
The Gramm-Leach-Bliley Act (GLBA), passed by the U.S. Congress in the year 1999, allows commercial banks to:
a. operate in all foreign countries. b. open new branches in Cuba. c. expand their business into other areas of finance, including insurance and selling securities. d. raise reserve requirements for other financial institutions. e. eliminate unit banking.
Should banks practice inflation-targeting? Give reasons to support your answer