In August 2011, Standard & Poor's (S&P) changed its rating on U.S. Treasury bonds from "AAA" to "AA+" based on the state of the federal government's budget deficit. This was the ________ a rating agency had given Treasury bonds less than a rating of
"AAA."
A) first time ever
B) second time since the year 2000
C) first time since the Great Depression
D) fifth time in history
Answer: D
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What is an inferior good?
A) a product of low quality that we do not want to purchase B) a product for which demand increases when income increases, and demand decreases when income decreases C) a product for which demand increases when income decreases, and demand decreases when income increases D) a product that is complementary E) a product that is a substitute for another, better good
Suppose that, for example in India, a minimum wage is instituted in the modern sector above the market clearing wage, while the rural traditional wage is market determined at a lower level than in the modern sector
(a) Describe the impact of this policy on the rural labor force, urban unemployment, and the rural wage. (b) Will the modern sector wage be equal to the traditional sector wage after markets equilibrate through migration? Explain. (c) What effect might moving costs have on the equilibrium you described in part (b)? (d) What effect might the introduction of factories to rural areas have no the equilibrium you described in part (b)?
A decrease in the real wage would result in a
A) movement along the labor demand curve, causing an increase in the number of workers hired by the firm. B) shift of the labor demand curve, causing an increase in the number of workers hired by the firm. C) movement along the labor demand curve, causing a decrease in the number of workers hired by the firm. D) shift of the labor demand curve, causing a decrease in the number of workers hired by the firm.
What type of policy does the government adopt in dealing with government-inhibited goods?
A) It subsidizes their consumption. B) It subsidizes their production. C) It provides them as public goods. D) It taxes, regulates, or prohibits their use.