If, for a given disposable income level, the disposable income line lies below the consumption curve, saving:
A. equals consumption.
B. equals disposable income.
C. is less than zero.
D. is greater than zero.
Answer: C
You might also like to view...
The above figure shows the market for rice in Japan. S2 represents the domestic supply curve, and S1 represents the world supply curve. Suppose a free market exists
If a $1 per unit tariff is imposed on imported rice, the quantity of imported rice will decrease by A) 10 units. B) 20 units. C) 30 units. D) 40 units.
Senator Approxmire opposes a proposal requiring that the monopsonist pay a minimum wage of at least Wmin, stating: "Even if the labor market is monopsonistic, economic theory unambiguously demonstrates that imposing a minimum wage causes employment to fall." Senator Approxmire is:
A. Correct because the law of demand states that as the wage rises, the firm demands less labor
B. Incorrect because the monopsonist would offer a wage of WA, which is higher than Wmin, and maintain its employment at L1
C. Incorrect because the monopsonist's effective MRC curve becomes ABCD, which means that it will choose to hire more workers, from L1 to L2, following the imposition of the minimum wage
D. Correct because the graph indicates that at the wage of Wmin, the monopsonist would not make a profit from hiring labor and so would not hire any at all
If actual inflation is greater than expected inflation, what is the relationship between the actual real wage and the expected real wage?
A) The actual real wage will be equal to the expected real wage. B) The actual real wage will be lower than the expected real wage. C) The actual real wage will be higher than the expected real wage. D) The relationship between the actual real wage and the expected real wage cannot be predicted.
When the interest rate on a bond is above the equilibrium interest rate, in the bond market there is excess ________ and the interest rate will ________
A) demand; rise B) demand; fall C) supply; fall D) supply; rise