Lenders buy bonds and borrowers sell them
a. True
b. False
Indicate whether the statement is true or false
True
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The combined effect (both income and substitution) of a wage increase is that
A) if the substitution effect outweighs the income effect, the labor supply curve slopes upward, but if the income effect outweighs the substitution effect, the labor supply curve is backward bending. B) the income effect always dominates, leading to less work at a higher wage. C) if the substitution effect outweighs the income effect, the labor supply curve is backward bending, but if the income effect outweighs the substitution effect, the labor supply curve slopes upward. D) the substitution effect always dominates, leading to more work at a higher wage.
Monetarists argue that fiscal policy is ineffective because:
a. the velocity of money is predictable. b. the crowding-out effect reduces investment. c. prices and wages are sticky in the short run. d. it causes the value of the dollar to depreciate.
Which of the following is most likely to be a fixed input in the short run for Joe's Garage?
a. the grease used to lubricate cars b. the part-time labor employed to repair cars c. the inventory of replacement parts d. the electricity used to heat and light the garage e. the garage used to repair cars
People hold money primarily because it
a. increases in value when there is inflation. b. serves as a store of value. c. serves as a medium of exchange. d. functions as a unit of account.