What is the relationship between the MRP and MPP of labor?
a. MRP is MPP multiplied by the price of the good.
b. MPP is MRP multiplied by the price of the good.
c. MRP is MPP divided by the price of the good.
d. MPP is MRP divided by the price of the good.
e. MPP is the wage rate that in equilibrium equals MRP.
A
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Suppose a tax is imposed on sellers. The more inelastic the demand for the taxed item, the
A) greater the share of the tax paid by sellers. B) smaller the deadweight loss from the tax. C) larger the decrease in consumption because of the tax. D) All of the above answers are correct.
By raising or lowering the _______, the Fed changes the cost of money for banks, which impacts the incentive to borrow reserves.
A. Reserve ratio B. Discount rate C. Money multiplier D. Yield
Exhibit 4-2 Supply and demand curves
In Exhibit 4-2, which of the following might cause a shift from S1 to S2?
A. A decrease in input prices. B. A decrease in consumer prices. C. An increase in input prices. D. An increase in consumer income.
If purchasing power parity holds between the U.S. and China:
A. the real exchange rate must be 1. B. the U.S. must no longer have a trade deficit. C. the nominal exchange rate must be 1. D. China must no longer have a trade deficit.