If the wage rate in a monopsonistic industry is $15, the marginal labor cost will be
a. $0
b. $1
c. $15
d. greater than $15
e. less than $15
D
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Suppose the government increases spending by $30 billion and raises taxes by $20 billion at the same time. Then:
A. interest rates will most likely increase. B. business investment is not likely to change. C. interest rates will most likely stay the same. D. business investment is likely to increase due to crowding out.
Which of the following would be the result of increasing the money available for banks to lend?
A. An increase in the reserve requirement B. A decrease in the Fed's holdings of U.S. Treasury securities C. An increase in the discount rate D. A decrease in the federal funds rate
Jonah lives in a small town where there is only one Mexican restaurant. Which of the following is likely to be true about the price elasticity of demand for meals at the Mexican restaurant?
A) Demand is likely to be perfectly inelastic. B) Demand is likely to be perfectly elastic. C) Demand is likely to be relatively elastic. D) Demand is likely to be relatively inelastic.
Inflation targeting is a framework for carrying out monetary policy whereby
A) the central bank adopts a rigid target for inflation and ignores declines in output. B) the central bank commits to achieving a publicly announced level of inflation. C) the central bank commits to achieving a target level of inflation which is never announced publicly. D) the central bank commits to a monetary growth rule.