Which one of the following statements regarding the intertemporal substitution hypothesis is false?
A. Labor supply responds to changes in the real wage.
B. Wages and hours of leisure will tend to move together over the course of the life-cycle.
C. Workers are willing reduce labor supplied during a recession.
D. Increases in unemployment may be voluntary as workers collect unemployment insurance benefits.
E. Increases in unemployment may be voluntary as workers trade income for leisure during low-wage periods.
Answer: B
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Import quotas ________ the price of imported goods and ________ the quantity consumed in the nation imposing the quota
A) raise; increase B) raise; decrease C) lower; increase D) lower; decrease
If the absolute value of the price elasticity of demand for aspirin equals 0.8 then
A) aspirin has few substitutes. B) the demand for aspirin is elastic. C) the demand for aspirin is inelastic. D) aspirin is a normal good.
Assume that the central bank purchases government securities in the open market. If the nation has low mobility international capital markets and a flexible exchange rate system, what happens to the GDP Price Index and current international transactions in the context of the Three-Sector-Model?
a. The GDP Price Index rises, and current international transactions becomes more positive (or less negative). b. The GDP Price Index rises, and current international transactions becomes more negative (or less positive). c. The GDP Price Index and current international transactions remain the same. d. The GDP Price Index rises, and current international transactions remain the same. e. There is not enough information to determine what happens to these two macroeconomic variables.
A linear demand curve has a:
A. constant slope and a constant elasticity, but they need not be equal. B. changing slope, but constant elasticity. C. constant slope, but changing elasticity. D. slope which is the same as the elasticity.