The market where currencies are exchanged is called the foreign exchange market
Indicate whether the statement is true or false
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An aide to a U.S. Congressman computes the effect on aggregate demand of a $20 billion tax cut. The actual increase in aggregate demand is less than the aide expected. Which of the following errors in the aide's computation would be consistent with an overestimation of the impact on aggregate demand?
a. The actual MPC was larger than the MPC the aide used to compute the multiplier. b. The aide thought the tax cut would be permanent, but the actual tax cut was temporary. c. The increase in income shifted money demand less than the aide had anticipated. d. The increase in income resulted in investment rising more than the aide had anticipated.
Human capital refers to the:
A. Tools and equipment available to workers B. Amount of financing available to start-up firms C. Number of workers available in the economy D. Education, training, and skills of workers
A firm is currently producing an output at which price equals the minimum point on the average variable cost curve. If wage rates increase, the firm will
A) increase its rate of output to make up for the higher variable costs. B) shut down since it would no longer be covering its variable costs. C) decrease its rate of output to offset the higher variable costs. D) not make any changes since its current rate of output is still minimizing its losses.
Scarcity:
a. ensures that people become satisfied with less than what they want. b. exists only during a recession. c. exists only in some countries. d. affects only poor people. e. requires people to make choices to satisfy their wants.