What is the difference between willingness to accept and willingness to pay? For a trade to take place, does the willingness to accept have to be lower, higher, or equal to the willingness to pay?
What will be an ideal response?
Willingness to accept is the lowest price that a seller is willing to receive to sell an extra unit of a good, while willingness to pay is the highest price that a buyer is willing to pay for an extra unit of a good. For a trade to take place, the buyer's willingness to pay must be greater than or equal to the seller's willingness to accept.
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The switch to flexible exchange rates in 1973 has made the effect of monetary policy on net exports a ________ important component of the monetary policy multiplier process, and thus has ________ the effectiveness lag
A) more, lengthened B) more, shortened C) less, lengthened D) less, shortened
Business cycles are linked to the interaction between:
a. the foreign exchange rate and the balance of payments account. b. the aggregate demand and aggregate supply curves. c. the demand and supply curves for a particular good. d. the substitution and the wealth effect. e. the long-run aggregate supply curve and the aggregate resource curve.
When aggregate demand shifts right along the short-run aggregate supply curve, unemployment
a. falls, so there are upward pressures on wages and prices. b. falls, so there are downward pressures on wages and prices. c. rises, so there are upward pressures on wages and prices. d. rises, so there are downward pressures on wages and prices.
Exhibit 12-9 Negative Income Tax
?
As shown in Exhibit 12-9, a family of four with an income of $20,000 receives ____ from the government:
A. zero payment B. the break-even income of $20,000 C. a $10,000 payment D. a $10,000 tax deferment