Refer to Reducing Long-Run Labor Usage. The scale effect of the wage change is the movement from point
a. X to point A.
b. X to point B.
c. B to point C.
d. C to point D.
c. B to point C.
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Securities markets perform a valuable economic function because they provide
a. an opportunity for investors to make money in a short time. b. the principal indicator of the performance of the U.S. economy. c. an easy way to transfer corporate securities, thereby reducing risk to investors. d. assurance that stock purchasers can get back the purchase price of their stock.
To maximize sales revenue, an oligopoly will expand output until the price is zero
a. True b. False Indicate whether the statement is true or false
Exhibit 16-3 Money market demand and supply curves
In Exhibit 16-3, assume an equilibrium with an interest rate of 15 percent and the money supply at $100 billion. The Fed uses its policy tools to move the economy to a new equilibrium at E2 with money supply of $150 billion and an interest rate of 10 percent. This change could be the result of a(n):
A. open market sale of securities by the Fed. B. higher discount rate set by the Fed. C. higher required-reserve ratio set by the Fed. D. open market purchase of securities by the Fed.
In order to increase the supply of a good, producers must
A) convince consumers to reduce the quantity demanded. B) see an increase in quantity supplied by competitors. C) reduce their per-unit costs of producing the good. D) cut back on labor to reduce production costs.