Panel (b) in Figure 6.1 reflects
a. low interest elasticity of money demand.
b. money demand to be highly interest elastic.
c. money demand to be completely interest insensitive.
d. None of the above
B
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Compared to an efficient perfectly competitive industry, the monopolist will
A) produce less output at a higher total cost. B) produce less output and charge a higher price. C) produce more output at a higher price and higher profit. D) produce more output at a lower price.
The relationship between changes in income and purchase of a good indicates
a. whether the good is a luxury or necessity. b. whether the good is normal or inferior. c. whether the good is a complement or substitute. d. Both a and b.
Minimum wages are:
A. not very controversial. B. always needed to guarantee workers an acceptable standard of living. C. a form of government interference in the free market. D. only enforceable at the federal level.
The principal effect of unemployment insurance on the entire U.S. economy is
a. that it spreads the costs of unemployment. b. that it eliminates the social costs of unemployment. c. that it reduces the social costs of unemployment. d. the reduction in the federal debt.