Suppose that land and capital are substitute resources. If rent rose, then the employment of capital would be _____ by the substitution effect and _____ by the output effect.
A. increased; increased
B. decreased; decreased
C. increased; decreased
D. decreased; increased
C. increased; decreased
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Under perfect capital mobility, monetary policy has the largest impact on the income under:
a. floating exchange rates. b. fixed exchange rates. c. dollarization. d. a currency union.
Which of the following markets best approximates the perfectly competitive market structure?
a. automobile manufacturing b. insurance c. world commodity markets d. airlines e. manufacture of stereo equipment
Which of the following is true if a market is in equilibrium?
a. price will be rising b. price will be falling c. quantity demanded is greater than quantity supplied d. quantity demanded is equal to quantity supplied e. quantity demanded is less than quantity supplied
If consumption is greater than disposable income, it follows that
A) interest rates are rising. B) the budget deficit is shrinking. C) saving is negative. D) the multiplier is inoperative. E) none of the above