What is the primary difference between the substitution and the income effect of a price change?
A) The substitution effect holds income constant and the income effect holds utility constant.
B) The substitution effect is always positive and the income effect is always negative.
C) The substitution effect holds utility constant and the income effect holds prices constant.
D) The substitution effect is always negative and the income effect is always positive.
C
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Edward Denison found that labor's contribution to output growth in the United States since 1929 was attributable to all the factors below except
A) rising population. B) an increase in the percentage of the population in the labor force. C) an increase in the number of hours worked per person. D) higher educational levels.
Assume that the M1 multiplier is 2.5. If the Federal Reserve purchases $200 worth of government securities, the money supply will
A) rise by $200. B) rise by $500. C) fall by $200. D) fall by $500.
Consider a law that limits women's access to certain "dangerous" occupations like coal mining and military combat service. Such a law would likely reduce women's wages because:
a. women would be overqualified for "non-dangerous" jobs. b. comparable worth would no longer exist between men's and women's occupations. c. women would be less likely to obtain college degrees. d. labor supply in female-intensive occupations would increase.
What is meant by the skill-bias technological explanation of increasing inequality?
A. Inequality has increased because technological advances over the last 40 years have complemented the productivity of unskilled labor relative to foreign labor. B. Inequality has increased because technological advances have not kept pace with the demand for education. C. There has been increasing inequality over the last 40 years among high-skilled workers. D. There has been increasing inequality over the last 40 years because unskilled workers use no technology. E. Inequality has increased because technological advances over the last 40 years have complemented the productivity of skilled labor relative to unskilled labor.