List three reasons why wages could be set above the equilibrium wage
minimum-wage laws
market power of labor unions
efficiency wages
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If a country wants to keep a foreign currency undervalued against the domestic currency:
A) it will buy both the foreign and domestic currency. B) it will sell both the foreign and domestic currency. C) it will buy the domestic currency and sell the foreign currency. D) it will buy the foreign currency and sell the domestic currency.
When an expansionary monetary policy leads to an acceleration in the rate of inflation, it will also result in
a. lower nominal interest rates. b. higher nominal interest rates. c. an appreciation of the dollar in the foreign exchange market. d. lower money wages.
If the monetary authorities want to lower the size of the monetary multiplier, they should
A. lower the legal reserve ratio. B. raise the legal reserve ratio. C. take actions to increase bank reserves. D. take none of these actions.
If an increase in investment of $50 causes an increase in real GDP of $250, the value of the spending multiplier is:
A. 5. B. 0.20. C. 0.80. D. 10.