When the wage rate rises, the substitution effect leads a worker to
a. increase consumption while the income effect leads to a decrease in consumption.
b. decrease consumption while the income effect leads to an increase in consumption.
c. increase consumption, as does the income effect.
d. substitute sleep for other leisure.
c. increase consumption, as does the income effect.
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Technological innovation in the production of computers has led to
A) a decrease in the quantity demanded for computers. B) a rightward shift of the supply curve for computers. C) a decrease in the quantity supplied of computers. D) None of the above.
If the supply of a good decreased, what would be the effect on the equilibrium price and quantity?
A. Price would increase, and quantity would decrease. B. Price would decrease, and quantity would decrease. C. Price would increase, and quantity would increase. D. Price would decrease, and quantity would increase.
Explanations about what caused the Great Recession differ sharply among economists. The so-called Minsky Explanation involves the following factors, except:
A. A massive euphoric bubble in housing prices that eventually burst B. A huge negative demand shock in the economy C. Flexible average price level in the economy D. Excessive access to home-mortgage loans
In practice, money supply and short-term interest rates are determined by the
a. Treasury and Commerce departments. b. Federal Open Market Committee. c. Board of Governors. d. House and Senate.