The supply curve is believed to bend backward at high wage rates because
a. income effects outweigh substitution effects.
b. substitution effects outweigh income effects.
c. the income and substitution effects work together to create the backward bend.
d. leisure time is less attractive.
a
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If the market supply curve and market demand curve for a good intersect at 600,000 units and there are 10,000 identical firms in the market, then each firm is producing
A) 600,000 units. B) 60,000,000,000 units. C) 60,000 units. D) 60 units. E) 10,000 units.
The difference between an agency office located abroad and a subsidiary bank located abroad is
A) an agency office is just a home bank in another country while a subsidiary bank is controlled by a foreign bank and subject to the same regulations as local banks. B) an agency office is just a home bank in another country while a subsidiary bank arranges loans and transfers funds but does not accept deposits. C) an agency office arranges loans and transfers funds but does not accept deposits while a subsidiary bank is controlled by a foreign bank and subject to the same regulations as local banks. D) an agency office arranges loans and transfers funds but does not accept deposits while a subsidiary bank is just a home bank in a foreign country. E) an agency office is controlled by a foreign bank and subject to the same regulations as local banks while a subsidiary bank arranges loans and transfers funds but does not accept deposits.
The IS curve would unambiguously shift up and to the right if there were
A) an increase in both government purchases and corporate taxes. B) an increase in both government purchases and the expected future marginal product of capital. C) an increase in the expected future marginal product of capital and a decrease in expected future output. D) a decrease in both corporate taxes and the expected future marginal product of capital.
The reserve ratio is 20 percent. The Fed buys $1 million in government securities from a bond dealer by transmitting the funds to the dealer's deposit account at Bank A Bank A loans the maximum amount possible to a construction company, which buys materials from a lumber yard. The lumberyard deposits the construction company's check in Bank B. What is the maximum loan Bank A can now make and the maximum loan Bank B can now make?
A) Bank A: 0; Bank B: $640,000 B) Bank A: 0; Bank B: $800,000 C) Bank A: $800,000; Bank B: $640,000 D) Bank A: $800,000; Bank B: 0