The government serves as an actor in the economy when it
A. alters anti-trust laws
B. increases defense spending
C. reduces the minimum wage
D. improves health and safety standards for certain industries
Ans: B. increases defense spending
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We have read in this chapter that people with insurance may be more likely to engage in risky behavior because they are insured. Does it make sense then that there should be an "insurance tax" on people that engage in these types of activities?
What will be an ideal response?
Which of the following are not included in the M1 definition of the money supply?
a. cash and currency b. checkable deposits c. money market deposit accounts d. All of the above are included.
The IS curve will shift down and to the left when
A. desired saving declines. B. consumption increases. C. the expected future marginal product of capital declines. D. government purchases increase.
If the price of the product produced by labor increases, the marginal revenue product of labor curve will
A. shift to the left. B. be unaffected because productivity of labor has not changed. C. shift to the right. D. become more elastic.