With respect to the labor supply curve, the income effect
A) reinforces the substitution effect.
B) lowers the opportunity cost of labor.
C) raises the opportunity cost of labor.
D) influences a person to work less as the wage rate increases.
D
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Chloe has a $15,000 personal loan at a nominal interest rate of 8 percent. If the inflation rate is 3 percent, what is the real interest rate paid on the loan?
A) 2.67 percent B) 3 percent C) 8 percent D) 11 percent E) 5 percent
For a common resource, the marginal social cost of the resource is ________ the marginal private cost
A) greater than B) equal to C) less than D) not comparable to
Suppose you are risk averse and you are deciding between two investments. One has a guaranteed return of 5% while the second has a 50% chance of a 10% return and a 50% chance of a 0% return. Which investment would you choose? Why?
What will be an ideal response?
The complete wage and price flexibility of the real business cycle framework implies that ________
A) the velocity of money is a constant B) the velocity of money times the money supply is equal to the nominal value of transactions over a given period of time C) aggregate output always equals potential output D) sustained economic contractions, like the Great Depression, cannot occur in real, historical time