The substitution effect in the work-leisure model induces a person to work less in response to higher wages, which tends to make the labor-supply curve slope upward
a. True
b. False
Indicate whether the statement is true or false
False
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Assume that the expectation of declining housing prices cause households to reduce their demand for new houses and the financing that accompanies it. If the nation has highly mobile international capital markets and a flexible exchange rate system, what happens to the real risk-free interest rate and GDP Price Index in the context of the Three-Sector-Model?
a. The real risk-free interest rate and GDP Price Index remain the same. b. The real risk-free interest rate falls, and GDP Price Index falls. c. The real risk-free interest rate falls, and GDP Price Index stays the same. d. The real risk-free interest rate rises, and GDP Price Index falls. e. The real risk-free interest rate rises, and GDP Price Index rises.
You are considering staying in college another semester so that you can complete a major in economics. In deciding whether or not to stay you should
a. compare the total cost of your education to the total benefits of your education. b. compare the total cost of your education to the benefits of staying one more semester. c. compare the cost of staying one more semester to the benefits of staying one more semester. d. compare the total benefits of your education to the cost of staying one more semester.
Figure 14-6
In the situation shown in , how could the Fed return the economy to potential output?
a.
decrease government spending
b.
decrease taxes
c.
sell U.S. government bonds to banks
d.
lower the discount rate
e.
lower the required reserve ratio
If the marginal cost of water pollution abatement is increased, then the optimal amount of water pollution increases.
Answer the following statement true (T) or false (F)