The substitution effect is thought to dominate the behavior of low-wage workers.
Answer the following statement true (T) or false (F)
True
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The crowding-out effect implies that:
a. increases in government purchases will lower interest rates and stimulate investment spending b. higher taxes reduce both consumption and saving. c. fiscal policy effects on interest rates will be offset by monetary policy. d. increases in government purchases increase income and the demand for loanable funds which will choke off some private spending.
One of the costs of the Federal Deposit Insurance Corporation's protection is
a. bank managers may take great risks with depositors' money b. the public pays closer attention to the bank managers' actions c. the Fed was forced to reduce its regulation of banks d. bank managers may act too cautiously with depositors' money e. banks' profits increased
Waiters in countries where it's customary to tip waiters will tend to have lower wages than will waiters in countries where tipping is not customary.
Answer the following statement true (T) or false (F)
Determinants of income differences include all of the following EXCEPT
A. moral hazard. B. marginal productivity. C. discrimination. D. age.