Last year the Jones family earned $40,000. This year their income is $42,000. In an economy with an inflation rate of 10 percent, which of the following is correct
What will be an ideal response?
The Jones' nominal income has increased and their real income has fallen
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According to Keynes, the "stickiness" of wage rates could best be explained by
A) short-term labor contracts. B) minimum wage laws. C) unions and long-term labor contracts. D) government interference.
In an effort to protect endangered species from the effects of logging in America's national forests, the federal government passes a law prohibiting logging in most of the state of Washington
Which of the figures above best illustrates the effect of this new law? A) Figure A B) Figure B C) Figure C D) Figure D E) None of the above because a prohibition cannot be illustrated using demand and supply figures.
Externalities are unintended costs or benefits that are imposed on unsuspecting people and that result from:
a. poor planning. b. intentional damages. c. excessive costs. d. excessive losses. e. the economic activity of others.
Although economists generally favor a negative income tax, there is little political support for it
a. True b. False Indicate whether the statement is true or false