Suppose the equilibrium wage rate in the labor market is $20 and the demand for labor decreases. If wages are sticky, there will be a
A. shortage of labor and the wage rate increases.
B. surplus of labor and the wage rate stays the same.
C. surplus of labor and the wage rate increases.
D. surplus of labor and the wage rate declines.
Answer: B
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Let's assume Ben can produce 3 units of a material good (M) or 3 units of a spiritual good (S) in a day, while Cal can produce 1 M or 2 Ss in a day. Both Ben and Cal can potentially produce a larger combination of M and S
A) if Ben specializes in S and Cal in M and they exchange with one another. B) if Ben specializes in M and Cal in S and they exchange with one another. C) if Ben specializes in both goods and doesn't exchange with Cal. D) only if Cal finds a way to also produce 3 M and 3 S per day.
A cash withdrawal from the banking system
A) decreases deposits. B) decreases reserves. C) decreases excess reserves. D) All of the above are correct.
Which of the following describes the relationship between the actual federal funds rate and that suggested by Taylor's rule following the recovery from the 2001 recession?
A) The federal funds rate was above that suggested by Taylor's rule. B) The federal funds rate was below that suggested by Taylor's rule. C) The federal funds rate was about equal to that suggested by Taylor's rule. D) There was not a clear relationship between the federal funds rate and that suggested by Taylor's rule.
If this is an open economy, quantity supplied of cars by the domestic producers will be ________. 
A. 20,000 B. 80,000 C. 60,000 D. 40,000