What weakness in the economic structures of Asian countries contributed to the severe financial crisis that Asian economies experienced in 1997?
A) Productivity: It increased rapidly and the countries were victims of their own success
B) Banking regulation: Banks were excessively regulated, which reduced profits.
C) Legal Framework: The system dealt unsuccessfully with companies in financial trouble
D) Natural Resources: Countries' lack of natural resources and failure to explore developing industries accumulated and led to the crisis.
E) High Taxes: High rates of taxation resulted in a reliance on imports.
C
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Workers work for after-tax wages, thus an income tax represents a reduction in the effective wage rate
a. True b. False
A recent college graduate who is looking for her first job would be considered _____
a. a discouraged worker b. underemployed c. overemployed d. unemployed e. not in the labor force
An increase in the price level will: a. make the consumption function flatter. b. make the consumption function steeper
c. increase consumption because wages will increase. d. decrease consumption because falling interest rates make it cheaper to borrow. e. decrease consumption because the value of net wealth will decrease.
"The price of compact fluorescent light bulbs fell because of improvements in production technology. As a result, the demand for incandescent light bulbs decreased. This caused the price of incandescent light bulbs to fall; as the price of incandescent
light bulbs fell the demand for incandescent light bulbs decreased even further." Evaluate this statement. A) The statement is false. A decrease in the price of compact fluorescent light bulbs would decrease the demand for incandescent light bulbs, but a decrease in the price of incandescent light bulbs would not cause the demand for incandescent light bulbs to decrease. B) The statement is false because the demand for incandescent light bulbs would increase as the price of compact fluorescent light bulbs fell. C) The statement is false because compact fluorescent light bulbs producers would not reduce their prices as a result of improvements in technology; doing so would reduce their profits. D) The statement is false because it confuses the law of demand with the law of supply.