When an individual's wage rises, the substitution effect tends to:
a. increase hours worked.
b. decrease hours worked.
c. leave hours worked unchanged.
d. an impossible prediction about what will happen to hours worked.
a
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The effect of government spending or tax cuts on national income is measured by the:
A. multiplier. B. output gap. C. aggregator. D. tax rate.
A barter economy is different from a money economy in that a barter economy
A. encourages specialization and division of labor B. involves higher costs for each transaction C. eliminates the need for a double coincidence of wants D. has only a few assets that serve as a medium of exchange E. promotes market exchanges
Since 2008, the Fed has conducted a policy that involves direct lending to private firms. Those actions of the Fed are called
A. open market operations. B. quantitative easing. C. federal funds rate targeting. D. credit policies.
Suppose Jordan and Lee are trying to decide what to do on a Friday. Jordan would prefer to see a comedy while Lee would prefer to see a documentary. One documentary and one comedy are showing at the local cinema. The payoffs they receive from seeing the films either together or separately are shown in the payoff matrix below. Both Jordan and Lee know the information contained in the payoff matrix. They purchase their tickets simultaneously, ignorant of the other's choice. 
Which of the following statements is true?
A. Both the lower-left and upper right cells are Nash equilibria. B. The upper-right cell is the only Nash equilibrium. C. The lower-left cell is the only Nash equilibrium. D. Both the upper-left and lower-right cells are Nash equilibria.