Why might businesses decide to hold on to products to sell later when the economy is experiencing high levels of inflation?
A. Taxes will limit production.
B. Prices will continue to rise.
C. Cash will be in short supply.
D. Income will remain constant.
B. Prices will continue to rise.
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When a U.S. Senator tells a campaign crowd that "High inflation rates are a much more serious economic problem than high unemployment rates," it is an example of
A. an empirically proven fact. B. a normative statement. C. a microeconomic argument. D. a positive statement.
Esther wants to buy a used car from her neighbor, who quotes a price of $18,000. Esther negotiates with her neighbor and offers him $16,500 for the car. This is an example of ________
A) bilateral bargaining B) collective bargaining C) arbitration D) speculation
Between 2007 and 2009, the U.S. unemployment rate rose from under 5 percent to over 8 percent. A Keynesian economist would most likely blame this increase in unemployment on:
A. an increase in the bargaining power of labor unions. B. a decline in the level of aggregate demand. C. a decline in aggregate supply. D. an increase in the minimum wage.
The supporters of a proposal to increase marginal taxes on those earning over $100,000 a year say this change would generate $500 million in new tax revenues. A supply-side economist would argue that the actual revenue raised will be
A. less than $500 million because some people will respond by working less. B. more than $500 million because interest rates will also be affected. C. more than $500 million, because lower income people will work harder when they perceive the tax system to be fairer. D. exactly $500 million because there are no offsetting factors to a tax increase.