A permanent increase in the real wage rate has a ________ income effect on labor supply than a temporary increase in the real wage, so labor supply is ________ with a permanent wage increase than for a temporary wage increase.
A. smaller; more
B. larger; more
C. larger; less
D. smaller; less
Answer: C
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If the interest rate is 10 percent per year, and you have $100,000 now, which of the following is closest to what your $100,000 will be worth in three years?
A) $155,000 B) $115,000 C) $120,000 D) $133,000
Which of the following is correct?
a. Unemployment insurance raises structural unemployment because it reduces the job search efforts of the unemployed. b. Most economists are skeptical of the value of unemployment insurance primarily because they believe that it results in a poorer match between workers and jobs. c. Studies show that when the unemployed become ineligible for benefits, the probability of their finding a job rises markedly. d. All of the above are correct.
In practice, the three measurements of inflation, the CPI, PPI, and GDP deflator:
A. all measure inflation, but focus on different parts of the economy. B. are all positively correlated. C. all closely track each other. D. All of these statements are true.
Refer to the above diagram. The economy is at equilibrium at point B. What fiscal policy would increase real GDP?
A. Decrease aggregate demand from AD2 to AD3 by decreasing government spending. B. Increase aggregate demand from AD2 to AD3 by decreasing taxes. C. Increase aggregate demand from AD2 to AD1 by decreasing taxes. D. Decrease aggregate demand from AD2 to AD3 by increasing government spending.