In a simple economy with no government, aggregate expenditure is
A. consumption plus investment.
B. MPC + MPS.
C. saving plus investment.
D. consumption plus the MPC.
Answer: A
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If the imposition of a binding minimum wage results in much higher unemployment among workers seeking minimum wage jobs,
a. firms will respond by demanding more labor. b. those workers who are employed will be worse off than before the minimum wage law. c. labor demand is relatively elastic. d. labor demand is relatively inelastic.
According to institutionally-focused economists,
A. asset inflation is a phenomenon that cannot occur. B. the direction of causation goes from MV to PQ. C. inflation is double the rise in money supply. D. price-setting conventions by institutions are the source of inflation.
Governments sometimes subsidize domestic industries. When this occurs
A) the governments also impose tariffs on imports to protect the industries even more. B) the subsidized industries have an advantage in international markets relative to non-subsidized industries. C) firms cannot be guilty of dumping because their prices are not below their costs. D) the subsidized industries sell less in international markets because it is more profitable to sell domestically.
A demand relationship in which a given percentage change in price will result in a larger percentage change in quantity demanded is
A) elastic. B) unit-elastic. C) inelastic. D) consistent with zero elasticity.