We use interest rates to measure the opportunity cost of holding money
Indicate whether the statement is true or false
TRUE
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The above figure shows a competitive firm's demand for labor assuming that the firm's output sells for $1 per unit. If the wage is $5 per hour, a 2 percent cut in all the workers' income tax will cause the firm to
A) demand less labor. B) demand more labor. C) raise the wage paid to the worker. D) None of above.
The demand for loanable funds comes from:
A. investment. B. savings. C. the government printing money. D. households spending on nondurable goods.
Karl Marx's view of income derived from interest is that it is
a. appropriate as long as the loanable funds market is in equilibrium b. ethical as long as everyone who receives it earns it c. allowable if the income is earned, not inherited d. necessary otherwise no loanable funds would be provided e. objectionable because property ownership, including ownership of capital, is unjustifiable
Two studies published in the New England Journal of Medicine link the risk of breast cancer to alcohol consumption. Young women who have nine drinks per week were reportedly 150 percent more likely to develop breast cancer. Considering the market for alcohol, an economist would predict a movement
a. up the demand curve as quantity demanded falls. b. up the supply curve as the demand curve shifts. c. down the supply curve as the demand curve shifts. d. down the demand curve as quantity falls.