According to the text, when management selects a price or quantity, it also selects the other. Explain why this is true
The firm's demand curve determines what quantity can be sold at various prices. Each point on the demand curve represents a price-quantity pair. Therefore, selecting one means selecting the other.
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When a minimum-wage law forces the wage to remain above the level that balances supply and demand, there are more workers willing to work than there are jobs, so some workers are unemployed
a. True b. False Indicate whether the statement is true or false
The Italian government collects a smaller amount of the taxes it is owed than the U.S. government. Other things being equal,
A. U.S. and Italian GDP should be equal. B. U.S. GDP may be higher than Italian GDP. C. U.S. GDP should be lower than Italian GDP. D. U.S. residents are better off than Italian residents.
In an open economy, a decrease in the government's budget deficit will ________ the domestic real interest rate and ________ the level of capital investment in the country, holding other factors constant.
A. increase; increase B. decrease; increase C. increase; decrease D. decrease; decrease
If there is a leftward shift of the money demand curve, which of the following should the Fed do if it wants to keep the price level stable?
a. Lower its interest rate target b. Sell bonds in the open market c. Wait, since the price level does not usually change when the money demand curve shifts d. Raise its interest rate target e. Buy bonds in the open market