The equilibrium output level in the country of Plutonia is $44 billion, while its potential output is $74 billion. Suppose the central bank of the country implements an expansionary monetary policy. Which of the following is likely to occur?
a. An increase in interest rates will stimulate investment, shifting the aggregate demand curve to the right.
b. A reduction in interest rates will stimulate investment, shifting the aggregate demand curve to the right.
c. A reduction in interest rates will lower investment, shifting the aggregate demand curve to the left.
d. An increase in interest rates will lower investment, shifting the aggregate demand curve to the left.
b
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When there is a cut in payroll taxes, there is a(n) ________ in the tax wedge that lowers the cost of labor. This tax cut will ________ the quantity of labor demanded and ________ the quantity of labor employed
A) increase; increase; increase B) decrease; increase; decrease C) decrease; increase; increase D) decrease; decrease; increase E) increase; decrease; decrease
Refer to the table below. If Fresh Laundry is currently producing 8 quality units, to maximize profit, Fresh Laundry should ________ the number of quality units as the current quality marginal revenue is ________ its marginal cost.
Fresh Laundry is a firm that produces laundry detergent. The table above summarizes Fresh Laundry's product quality marginal revenue and marginal cost at various quality levels.
A) increase; less than
B) maintain; greater than
C) increase; equal to
D) maintain; equal to
Some economists argue that the minimum wage:
A. drives some labor to occur "under the table." B. causes some employers to hire undocumented migrants driving up wages overall. C. leads some employers to pay workers cash and then report these payments to the government. D. All of these are true.
Most of the women with children on welfare are
A. "Welfare Queens". B. either working, looking for work, or being trained for work. C. having one baby after another. D. enjoying a fairly high standard of living.