In comparison to a government that runs a balanced budget, when the government runs a budget deficit,
A) business investment will fall. B) the equilibrium interest rate will fall.
C) household savings will fall. D) none of the above
A
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Tax saving so that people spend more and firms' profits are higher
Answer the following statement(s) true (T) or false (F)
What are some criticisms of the CPI as a measure of inflation?
In 1913, the Ford Motor Company decided to pay its employees $5 a day. This wage was significantly higher than what any other organization offered. Henry Ford believed that this wage would make his employees happier, increase their productivity, and lower employee turnover. Economists would say that Mr. Ford offered his employees
a. a union. b. an efficiency wage. c. a diminishing rate of marginal return. d. a leisure wage.
All else equal, the price elasticity of demand tends to be higher when:
A. a good has many substitutes. B. the time horizon is relatively short. C. supply increases. D. people spend a small fraction of their budget on the good.