A wage differential between skilled and unskilled workers exists because skilled workers have higher marginal products than unskilled workers
a. True
b. False
Indicate whether the statement is true or false
True
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If the bank returns $1,060 on the $1,000 deposited for a year during which inflation was 4 percent, the real interest rate is
A) 2 percent. B) 6 percent. C) -2 percent. D) 16 percent. E) 10 percent.
The effect that a gift given to a U.S. citizen from a foreign resident will have on the balance of payments is to
A) increase the current account balance. B) have no effect on the balance of payments if the gift was made in the U.S. C) have no effect on the balance of payments if the gift was made by a foreign country. D) decrease the balance of payments.
Hurricane Katrina destroyed much of New Orleans and other parts of the South. Which of the following statements is true? The hurricane:
A. caused the production possibilities frontier of the United States to shift in. B. caused the production possibilities to increase, since it created a lot of work to rebuild the city affected areas. C. caused the production possibilities frontier of the United States to shift. D. didn’t change the production possibilities frontier, but moved from a point on the frontier to a point inside the frontier.
Government programs that take money from high-income people and give it to low-income people typically
a. improve economic efficiency by reducing poverty. b. reduce economic efficiency because they distort incentives. c. have no effect on economic efficiency because they both reduce poverty and distort incentives. d. sometimes improve, sometimes reduce, and sometimes have no effect on economic efficiency.