Which of the following explains why the demand for money curve has an inverse relationship between the interest rates and the quantity of money demanded?
A. As the interest rate rises, the opportunity cost of holding money rises, and people respond by converting cash or checking account balances into interest-bearing financial investments.
B. As the interest rate rises, people find it advantageous to borrow money, which increases the quantity of money demanded.
C. As the interest rate falls, the opportunity cost of holding money rises, and people respond by converting cash or checking account balances into interest-bearing financial investments.
D. As the interest rate rises, the demand for money curve shifts outward to the right.
Answer: A
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In a competitive labor market, a minimum wage law set above the equilibrium wage rate
A) creates a shortage of labor. B) causes equality between the quantity of labor supplied and the quantity demanded. C) creates a surplus of labor. D) lowers the wage rate paid to workers. E) has no impact.
A decrease in the interest rate will cause the intertemporal budget constraint to _______________ through the endowment point.
A. pivot clockwise B. pivot counter-clockwise C. shift clockwise D. shift counter-clockwise
If, after hiring the 6th worker, a firm's output falls, then the marginal product of the 6th worker is negative
Indicate whether the statement is true or false
Which of the following conditions might move the labor supply curve to the left?
a. As the hospital nursing staff grew older, more of them reduced their hours to part time. b. The chance to take part in world-class research inspired candidates to apply for the fellowship. c. A large number of immigrants entered the state in search of better economic opportunities. d. More college graduates than ever were entering the work force with student loans to pay.