In the traditional Keynesian model, if the government increases government spending,
A. the C + I + G + X line will shift down and the aggregate demand curve will shift to the left.
B. the C + I + G + X line will shift down but the aggregate demand curve will not shift.
C. the C + I + G + X line will shift up but the aggregate demand curve will not shift.
D. the C + I + G + X line will shift up and the aggregate demand curve will shift to the right.
Answer: D
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The self-interest model predicts that the outcome of the "ultimatum bargaining game" in which the allocator starts with $20 is that
A. the allocator will offer the receiver $0.01 and will propose to keep $19.99 for himself. B. the receiver will always reject the allocator's proposal. C. the allocator will offer the receiver $10 and keep $10 for himself. D. the allocator will always keep the full $20.
To maintain a fixed exchange rate via intervention in the markets, a government should:
a. be ready to crack down on illegal traders. b. be ready to buy the home currency with foreign currency reserves when the home currency's value declines. c. be ready to sell the home currency when the home currency's value declines. d. be ready to borrow funds from international banks when the home currency's value declines.
Taxes can have an important effect on:
A. the labor supply. B. saving. C. economic growth. D. All of these
The marginal revenue product of labor is
A. the additional revenue a firm earns by employing one additional unit of labor. B. the additional revenue the firm makes by selling one unit of labor. C. the marginal product of capital times the price of labor. D. the additional profit a firm earns by employing one additional unit of labor.