Expectations that disposable income will increase in the future will _
What will be an ideal response?
shift the current consumption function upward
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A good salesperson can sell $1,000,000 worth of goods, while a poor one can sell only $100,000 worth of goods. Job applicants know if they are good or bad, but the firm does not
A firm will offer job applicants a choice between a fixed salary of $25,000 or 20% commission. Assuming risk-neutral salespersons and the possibility of opportunistic behavior, will this choice of contracts allow the firm to distinguish between good salespersons and bad ones before the hiring decision is made?
Money as a medium of exchange I. Facilitates the exchange of goods II. Reduces the incentive to barter
A) I only B) II only C) Both I and II D) Neither I nor II
Refer to the above figures. Which panel(s) represent the effect of an increase in the price level?
A) Panel A only B) Panels A and C only C) Panel D only D) none of the panels
Which of the following describes the role of the government in a fixed exchange rate regime?
a. establishing capital controls b. controlling budget deficits c. buying and selling of currency by the central bank d. expanding the money supply