Because the minimum wage is not indexed to inflation, when there is inflation the nominal minimum wage ________, and the real minimum wage ________.
A. increases; decreases
B. decreases; remains constant
C. remains constant; decreases
D. remains constant; remains constant
Answer: C
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Because of the presence of asymmetric information problems in credit markets, an expansionary monetary policy causes a ________ in net worth, which ________ the adverse selection problem, thereby ________ increased lending to finance investment
spending. A) decline; increases; encouraging B) rise; increases; discouraging C) rise; reduces; encouraging D) decline; reduces; discouraging
The preferences of the representative consumer over consumption and leisure are represented by use of a
A) production function. B) utility function. C) benefit function. D) preference function.
The railroad industry in the United States is used as an example of ______.
a. the deadweight loss caused by perfect competition b. government ownership of monopolies c. how monopolies can fail to innovate d. how monopolies are innovators
Answer the following statements true (T) or false (F)
1. Regulatory capture in government often happens because the people who are most qualified to supervise and regulate an industry oftentimes are or have been the leaders of the industry. 2. Deregulation of an industry will always lead to an improvement in economic efficiency. 3. Loan guarantees provided by government will reduce the willingness of investors to take on the risk in a project. 4. "Informal payments" or "under-the table fees" are a common form of corruption. 5. The U.S. is among the countries that have very low levels of political corruption, as reported in the Global Corruption Barometer of 2010-11.