Which of the following is an economic explanation for the "beauty premium"?
a. Employers pay very attractive women less than average-looking women because they believe them to be less intelligent.
b. Employers pay above-average-looking men more than above-average-looking women.
c. Employers pay above-average-looking women more than average-looking women because customers prefer to deal with better-looking women.
d. Employers pay above-average-looking men more because they signal to the market that they are willing to spend more money on personal grooming, a sign of wealth and stability.
c
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If there is no Ricardo-Barro effect, when the government runs a budget surplus, it
A) contributes to financing investment. B) competes with businesses for private saving. C) shifts the demand for loanable funds curve rightward. D) shifts the supply of loanable funds curve leftward. E) shifts the demand for loanable funds curve leftward.
When Johanna cut prices in her jewelry store by 20 percent, the dollar value of her sales fell by 20 percent. This indicates that
A. demand was elastic. B. demand was inelastic. C. demand was unit elastic. D. the demand curve was vertical.
In the 1960s, many economists and policymakers believed the trade-off between inflation and unemployment was permanent
Indicate whether the statement is true or false
The rational expectations hypothesis implies that when macroeconomic policy changes
A) the economy will become highly unstable. B) the way expectations are formed will change. C) people will be slow to catch on to the change. D) people will make systematic mistakes.