For Meg, the substitution effect of an interest-rate increase is stronger than the income effect. In response to a higher interest rate, will Meg save more or will she save less?
In response to a higher interest rate, Meg will save more.
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Without warranties, used car buyers can assume that all used cars are "lemons" because of
A) moral hazard. B) moral dilemma. C) adverse selection. D) adverse reaction.
The model of aggregate demand and aggregate supply can NOT be used to:
A. discuss the pros and cons of income tax cuts. B. evaluate a tax cut's effect on short run economic fluctuations. C. assess a tax cut's effect on longer run issues such as the national debt. D. to discuss income distribution.
If it takes $1 to buy 100 yen, then the exchange rate ______.
a. is 100 yen per $1 from the U.S. perspective and is $1 per 100 yen from the Japanese perspective b. is $100 per 1 yen from the Japanese perspective and is $1 per 100 yen from the U.S. perspective c. is $1 per 100 yen from the U.S. perspective and is 1 yen per $0.01 from the Japanese perspective d. is $1 per 100 yen from the Japanese perspective and 100 yen per $1 from the U.S. perspective
Which of the following will NOT increase the productivity of labor?
A. technological improvements B. an increase in the capital stock C. improvements in education D. an increase in the size of the labor force