If the market wage for fast-food restaurants is $11 and the government enforces a minimum wage of $7, the unemployment rate will
A. Increase as quantity of labor supply decreases and quantity of labor demand increases.
B. Increase as quantity of labor supply increases and quantity of labor demand increases.
C. Not be affected by the minimum wage.
D. Increase as quantity of labor supply increases and quantity of labor demand decreases.
Answer: C
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In 2020, the price for a market basket of consumer goods is $800. In the base year, the cost of the identical market basket was $1,000. The price index in this case is
A. 130.0. B. 80.0. C. 800.0. D. 180.0.
The most visible market signal of the Fed's activity is the
A. Federal funds rate. B. Equilibrium interest rate. C. Discount rate. D. Prime lending rate.
In an open economy, an increase in net exports because of increased demand for domestic products by foreigners should cause the domestic real interest rate to ________ and should cause desired saving minus desired investment to ________.
A. fall; fall B. rise; fall C. rise; rise D. fall; rise
Starting from long-run equilibrium, a war that raises government purchases results in ________ output in the short run and ________ output in the long run.
A. lower; potential B. higher; potential C. higher; higher D. lower; higher