If the price of labor goes up and a firm replaces some workers with more machines, this is the _______ effect; when the price of a resource declines, and consequently the level of production rises, this is the _______ effect.
Fill in the blank(s) with the appropriate word(s).
substitution; output
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When there is a recessionary gap, inflation will ________, in response to which the Federal Reserve will ________ real interest rates, and output will ________.
A. decline; lower; decline B. increase; raise; decline C. decline; lower; expand D. decline; raise; decline
In the basic closed-economy ISLM model, as the interest sensitivity of investment spending increases, fiscal policy has ________ effect on output and monetary policy has ________ effect on output
A) less; less B) more; more C) more; less D) less; more
A tax wedge:
A. refers to the difference in the price the buyer pays and the price the seller keeps. B. only occurs in markets when the tax is placed on sellers. C. only occurs in markets when the tax is placed on buyers. D. only occurs in markets when taxes are placed on large corporations.
In the United States, the Federal Deposit Insurance Corporation (FDIC) collects deposit insurance premiums from banks and guarantees bank deposits up to
a. $100,000. b. $200,000. c. $250,000. d. $500,000.