A reduction in the minimum wage will tend to cause which of the following?
A) a reduction in poverty
B) an increase in the number of workers employed
C) an increase in the quantity supplied of labor
D) a reduction in the quantity demanded of labor
Answer: B
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Assuming an decrease in money demand, then to keep interest rates constant the Fed must
a. keep the money supply constant. b. conduct an open market sale of bonds. c. reduce the required ratio. d. both b and c. e. None of the above
It has been argued that a monopolistically competitive industry involves "waste" because
A) there is too much product differentiation making shelves too crowded. B) they end up producing to the right of the minimum of the average total cost curve and the price is below the marginal cost. C) the firms do not equate marginal cost to marginal revenue to find the profit maximizing price and output. D) the firms do not produce at the minimum of the average total cost curve and price is above marginal cost.
When the government levies a $100 million tax on people's income and puts the $100 million back into the economy in the form of a spending program, such as new interstate highway construction, the:
a. tax, then, generates a $100 million decline in real GDP. b. level of real GDP expands by $100 million. c. effect on real GDP is uncertain. d. tax multiplier overpowers the income multiplier, triggering a rollback in real GDP.
Why does the International Ladies' Garment Workers Union pay for advertising that promotes American- made textile products?