Labor unions support the minimum wage because
A) the increased unemployment is good for labor.
B) the value associated with the deadweight loss goes to labor unions.
C) labor unions prefer to operate in black markets.
D) it puts upward pressure on all wages.
E) union members are usually paid the minimum wage.
D
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Which of the following is likely to lead to an increase in the gross domestic product of a country?
A) An increase in the tax rates in the country B) An increase in the interest rate in the country C) An increase in the capital stock of the economy D) An increase in the unemployment rate in the country
Initially, the reserve ratio is 10 percent. Now banks decide they want an additional 10 percent of deposits as reserves. There are no currency drains. If the Fed buys $1 million of U.S. government securities, the money supply will
A) not change because of the excess reserves banks keep on hand. B) increase by $1 million. C) increase by $5 million. D) increase by $10 million.
Suppose that the nominal interest rate increases while the expected inflation rate rises. Given this information, we know with certainty that the real interest rate
A) will not change. B) will fall. C) will fall, but only if the increase in the nominal rate is smaller than the increase in expected inflation. D) will fall, but only if the increase in the nominal rate is greater than the increase in expected inflation. E) none of the above
If a firm is producing the level of output at which long-run average cost equals long-run marginal cost, then
A. long-run total cost is at its minimum point. B. long-run average cost is at its minimum point. C. long-run marginal cost is at its minimum point. D. both a and b E. all of the above