Which of the following describes an individual’s labor supply curve when the income effect is stronger than the substitution effect?
a. U-shaped
b. backward bending
c. upward sloping
d. downward sloping
b. backward bending
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Which of the following is an example of natural monopoly?
A) cellular phone companies in a large city B) local water utility companies C) major league sports franchises in the largest cities D) All of the above are natural monopolies.
According to the traditional Keynesian school of thought, expansionary fiscal and monetary policy will: a. increase interest rates, thereby shifting the investment function to the right. b. reduce both consumption and investment spending, thereby eliminating all inflationarypressures
c. reduce investment spending, thereby stabilizing the aggregate supply shocks. d. stimulate both consumption and investment spending, thereby increasingaggregate demand. e. shift the aggregate demand curve to the left, thereby reducing the unemployment rate.
Which of the following was not a lesson from the 2007-2009 financial crisis?
a. Regulatory failures were the result of weaknesses across the regulatory structure. b. The financial system operated with too much leverage. c. The business cycle no longer applies to economic analysis. d. Monetary policy alone may not be sufficient to stabilize aggregate demand.
The steeper the short-run aggregate supply curve, the more impact a given shift of the aggregate demand curve has on real GDP and the more impact it has on the price level, so the smaller the spending multiplier
Indicate whether the statement is true or false