Absent government interference, the wage rate for labor in a competitive market is established
A) solely by the firm's demand for labor.
B) solely by the market supply of labor.
C) by both the demand for and supply of labor at each individual firm.
D) by the the market supply and market demand for labor.
D) by the market supply and market demand for labor
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Which economic question depends on the incomes that people earn and the prices they pay for goods and services?
A) Why? B) How? C) For whom? D) What? E) Where?
Which one of the following would benefit financially from unanticipated inflation?
A) a borrower whose loan has a fixed nominal interest rate B) a borrower with an adjustable rate mortgage C) a bank that has made loans at a fixed nominal interest rate D) a firm whose workers are covered by a COLA agreement
Most economists believe that it is impossible for government programs that benefit the rich to also benefit the poor.
Answer the following statement true (T) or false (F)
Three candidates for political office disagree over the benefits of enlarging the federal budget deficit. Candidate X says the stimulation package is needed to increase employment and real GDP; Candidate Y says it will only cause higher prices; and Candidate Z says it will have no effect on either real GDP or the price level. How do the three candidates differ with respect to the condition of the economy and the effects of fiscal policy?
A. Candidate X thinks the economy is below the full-employment real GDP and that the short-run aggregate supply curve is horizontal. Candidate Y believes the economy is at full employment. Candidate Z believes the expansionary policy will result only in direct fiscal offsets. B. Candidate X thinks the simple Keynesian model is applicable, while Y thinks the expansionary policy will fully crowd out private investment. Z believes the economy is experiencing a recessionary gap. C. Candidate X thinks the simple Keynesian model is applicable; Y thinks the short-run aggregate supply curve is horizontal; and Z thinks the expansionary policy will generate lower interest rates. D. Candidate X thinks the short-run aggregate supply curve is upward sloping; Y thinks interest rates will rise; and Z thinks the economy is at full employment.