In a capitalist market economy, the decision to save is made by the same people who make the major investment decisions
a. True
b. False
Indicate whether the statement is true or false
False
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Assume the federal government raises taxes (a contractionary fiscal policy). If the tax increase affects AS and AD equally, then real GDP will ________ and the price level will ________
A) decrease; decrease B) increase; be unchanged C) increase; increase D) decrease; be unchanged E) increase; decrease
Can frictional unemployment ever be totally eliminated? Explain your answer
What will be an ideal response?
The marginal expenditure of a monopsonist is $4. The wage it currently pays is $3. The labor supply curve has a constant elasticity. What is the elasticity of the labor supply?
A) 0.33 B) 0.66 C) 1 D) 3
When constructing a production possibility curve for an economy, which of the following is assumed to be constant?
a. The quantity of resources b. The government budget c. The quantity of goods produced d. The price level e. The money supply