The elasticity of labor supply:
A. for a town should equal the elasticity of labor supply for a state.
B. should be greater for a state than for a town because people can travel more easily between states than between towns.
C. should be greater for a town than for a state because people are more likely to consider work in a neighboring town than in another state.
D. for a town is not related to the elasticity of labor supply for a state.
Answer: C
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Suppose a bank has checkable deposits of $100,000 and the required reserve ratio is 20 percent. If the bank currently has $100,000 in reserves, it could expand the money supply by as much as:
a. $100,000. b. $400,000. c. $0. d. $20,000. e. $80,000.
The data on U.S. growth rates during the last half of the 20th century suggest that when the saving rate increases,
a. the rate of growth can increase or decrease depending on the phase of the businesscycle the economy is in b. the rate of economic growth increases c. the rate of economic growth decreases d. the rate of economic growth is unaffected e. countercyclical fiscal policy is neutralized
Which of the following statements is true?
A) If current Real GDP is greater than Natural Real GDP, the economy is in a recessionary gap. B) If current Real GDP is less than Natural Real GDP, the economy is in long-run equilibrium. C) Wages are flexible if the economy is self-regulating. D) Wages rise but prices remain constant in long-run equilibrium. E) All economists believe the economy is self-regulating.
Suppose the utility function for a firm manager is U = ? + bQ, where Q is output, ? is profit, and b is a positive constant. How would the firm's output compare with what it would be if the manager's objective was to maximize profit?
A. It would be less than the profit-maximizing output. B. It would be greater than the profit-maximizing output. C. It would be the same as the profit-maximizing output. D. None of the statements is correct.