(Consider This) Government passes a law requiring all domestic clothing factories to pay workers at least $20 per hour. As a result, domestic clothing companies move their operations overseas, leaving domestic workers unemployed. This situation
illustrates the problem of:
A. political corruption.
B. unintended consequences.
C. misdirection of stabilization policy.
D. principal-agent.
Answer: B
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Macroeconomics
A) studies the behavior of the economy as a whole. B) involves the interaction between different countries in specific markets. C) studies the behavior of individual consumers, firms and markets. D) studies how computer automation has changed economics.
In the market for reserves, if the federal funds rate is above the interest rate paid on excess reserves, an open market purchase ________ the supply of reserves and causes the federal funds interest rate to ________, everything else held constant
A) decreases; fall B) increases; fall C) increases; rise D) decreases; rise
In the new Keynesian model, the ultimate effect on inflation of an anticipated aggregate demand shock is ________
A) less than if that event was unanticipated B) greater than if that event was unanticipated C) the same as would develop if that event had never occurred D) independent of whether or not that event is anticipated or unanticipated
Countries that maintain a constant gold value for their currencies are said to be on a gold standard
a. True b. False Indicate whether the statement is true or false