An increase in the real value of stock prices, which is independent of a change in the price level, would affect aggregate demand due to the:
A. foreign purchases effect.
B. real-balances effect.
C. wealth effect.
D. interest-rate effect.
Answer: C
You might also like to view...
For those workers who receive fringe benefits, such as health insurance and pensions, the additional income this results in—over and above the average hourly wage—is as much as (for some workers)
A. 10–12 percent. B. 30–40 percent. C. 51–62 percent D. 70 percent or more.
A speculative attack involves massive sales of a currency or purchases of a currency that cause a sharp change in the exchange rate under a exchange rate system
A) weak; strong; fixed B) strong; weak; fixed C) weak; strong; floating D) strong; weak; floating
A firm has a fixed cost of $500 in its first year of operation. When the firm produces 100 units of output, its total costs are $4,500 . The marginal cost of producing the 101st unit of output is $300 . What is the total cost of producing 101 units?
a. $46.53 b. $800 c. $4,800 d. $5,300
The labor demand curve slopes down because
A. fewer workers work at low wages. B. capital will substitute for labor as wages decrease. C. of the diminishing marginal product of labor. D. of the income effect of rising wages.