Supply-side policy suggests that if we _______ taxes of workers, the _________ labor will increase, causing equilibrium wages to ________.
A. raise, supply of, decrease
B. cut, supply of, increase
C. raise, demand for, increase
D. cut, supply of, decrease
Answer: D
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Suppose the measured unemployment rate is 7.5% and the true natural rate of unemployment is 5.1%. If the chair of the Fed believes the natural rate of unemployment to be 6.7%, then the chair will
A) stimulate the economy when it should be slowed. B) slow the economy when it should be stimulated. C) stimulate the economy, exactly as called for. D) slow the economy, exactly as called for.
Which of the following statements is not correct?
a. A seller would be eager to sell her product at a price higher than her cost. b. A seller would refuse to sell her product at a price lower than her cost. c. A seller would be indifferent about selling her product at a price equal to her cost. d. Since sellers cannot set the price for their product, they must be willing to sell their product at any price.
The behavior of profit-maximizing producers is guided by
A. Philanthropy. B. Social costs. C. Self-interest. D. Aesthetic concerns.
In the private sector where firms compete for profit, if a firm is inefficient, ________. In the public sector, if a government bureau is producing a necessary service and is doing so inefficiently, ________.
A. it does not need to worry about customers; the market will drive it out of business B. the market will drive it out of business; it does not need to worry about customers C. the market will drive it out of business; the market will drive it out of business D. it does not need to worry about customers; it does not need to worry about customers