The liquidity effect indicates that expansionary monetary policy causes
A) interest rates to fall.
B) interest rates to rise.
C) bond prices to fall.
D) inflation.
A
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If you pay $2,000 in taxes on an income of $20,000, and a tax of $2,700 on an income of $30,000, then over this range of income the tax is
A) regressive. B) proportional. C) progressive. D) There is insufficient information to answer the question.
An economic slow-down predicts the new equilibrium wage would be:
A. lower because the labor demand curve shifts left. B. higher because the labor demand curve shifts left. C. lower because the labor demand curve shifts right. D. higher because the labor demand curve shifts right.
Factory workers who work the day shift earn less per hour than similarly-skilled factory workers who work the night shift. The difference in pay is attributed to
a. the marginal product of labor. b. the marginal product of capital. c. diminishing marginal returns. d. a compensating differential.
Keynesian economists believe:
A. government policies do not affect economic activity. B. most government policies would probably make things worse. C. governments can implement policy proposals that can positively impact the economy. D. the economy ought to be left to market forces.