The primary reason we think of inflation as bad even when wages rise with it is that it:
What will be an ideal response?
distorts the information delivered by prices
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Suppose the downward sloping labor demand curve shifts rightward in a labor market with a single employer (monopsony). What happens to the equilibrium wage and level of employment in the market?
A) Wage and level of employment increase. B) Wage increases and level of employment declines. C) Wage decreases and level of employment increases. D) Wage and level of employment decline.
Giving the Fed a high degree of independence means all but:
A. the Fed governors will not be as tempted by political pressure. B. it is less likely to expand the money supply simply to make it cheaper for the government to repay its debt. C. technocrats-rather than politicians-are in charge, which tends to increase people's trust in the stability of the dollar. D. The federal government will not have to borrow to finance its budget deficit.
Economists need to develop abstractions in order to: a. avoid analyzing real-world economic interactions, which are too complicated to understand. b. distinguish normative economic behavior from positive economic behavior
c. avoid committing the fallacy of composition. d. understand and explain economic behavior.
Abigail wishes to spend more time this week studying for her classes. Using the idea of a production possibilities curve, and assuming Abigail is currently spending all of her time efficiently, Abigail can spend more time studying this week only if
a. she also spends more time doing other things. b. she spends less time doing other things. c. Daylight Savings Time begins this week, so everyone moves their clocks ahead one hour. d. none of the above.