Other things held constant, private disposable oncome would increase if
A. Taxes increase
B. Government transfers increase
C. Consumption increases
D. Government purchases increase.
Answer: D. Government purchases increase.
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Explain what would happen if the equilibrium wage in the labor market was below the legislated minimum wage
What will be an ideal response?
Economics is as much art as it is science
a. True b. False
Given the expected price level, policies for reaching potential GDP will work best if the money supply is: a. large, so that prices at potential GDP are below expectations and people can afford to buy enough goods to support the natural level of employment. b. large enough, so that prices at potential GDP are above expectations and firms can afford to hire workers. c. small, so that prices at
potential GDP are below expectations and people can afford to buy enough goods to support the natural level of employment. d. small, so that prices at potential GDP are above expectations and firms can afford to hire the workers. e. exactly the size that makes prices equal to the prices people expected to prevail.
An appreciation of the Japanese yen relative to the U.S. dollar will
a. increase aggregate demand in the United States. b. increase aggregate supply in the United States. c. increase aggregate demand in Japan. d. decrease aggregate supply in Japan.