Refer to Figure 6.4. If the current market transactions occur only over the output level where a buyer's willingness to pay is greater than a seller's willingness to accept, the government could have set:
A. a maximum price at A.
B. a minimum price at A.
C. a minimum price at C.
D. There is not sufficient information.
Answer: B
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The theory of investment that emphasizes the role of expected growth in real GDP on investment spending is known as
A) the theory of animal spirits. B) the accelerator theory. C) real business cycle theory. D) the multiplier theory.
In the above figure, if the government imposed a minimum wage of $8 per hour in this labor market, the increase in the hourly wage for those who are able to keep their jobs is
A) $2 per hour. B) $4 per hour. C) $6 per hour. D) $8 per hour.
The interest-rate-based monetary policy transmission mechanism suggests that the changes in the money supply affect aggregate spending
A. directly through interest rates and planned consumption spending. B. indirectly through tax rates and planned consumption spending. C. directly through interest rates and planned government spending. D. indirectly through interest rates and planned investment spending.
Increases in productivity cause the:
A. production function to shift upward. B. production function to shift downward. C. depreciation function to shift downward. D. investment curve to shift downward.