A good that is always used with another good
a. elasticity of demand
b. substitution effect
c. law of demand
d. complement
e. substitute
Ans: d. complement
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In the Keynesian framework, as long as output is below the equilibrium level, unplanned inventory investment will remain negative, firms will continue to ________ production, and output will continue to ________
A) lower; fall B) lower; rise C) raise; fall D) raise; rise
In 2005, about 5 percent of all members of the U.S. labor force were holding more than one job. This is called moonlighting. To reduce unemployment, should the government ban moonlighting?
What will be an ideal response?
The substitution effect takes place as we move
A. upward from I to J.
B. down from J to I.
C. up from J to K.
D. down from K to J.
An increase in the federal funds rate could be caused by:
A. an open market purchase of government securities. B. an increase in the excess reserves of the banking system. C. an increase in the reserve requirement. D. a cut in the discount rate.