In a labor market characterized by bilateral monopoly, the wage rate will:
A. be logically indeterminate.
B. be established at the level desired by the union.
C. be established at the level desired by the employer.
D. always be established at the competitive level.
Answer: A
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Those hurt by inflation include
a. labor unions with COLA clauses in their labor contracts b. borrowers who are indebted to banks and other lending institutions c. savers who hold checking and saving accounts in banks d. producers of goods such as automobiles, computers, and food e. owners of precious metals, antiques, and works of art
Refer to the figure below.
If a price ceiling were imposed at $4, consumer surplus would be:
A. $20. B. $28. C. $24. D. $36.
Table 29-1Effects of an open-market transaction on the balance sheets of banks and the fed (in millions of dollars) Banks ? Federal Reserve System ? Assets Liab. Assets Liab. Reserves +$10 ? U.S. Gov’t Bank Reserves U.S. Gov’t ? Sec. +$10 +$10 Securities?$10 ? ? ? ? After the transaction in Table 29-1 is completed, what happens to actual reserves, required reserves, and excess reserves? Assume the required reserve ratio is 25 percent.
A. Actual reserves increase by $10 million, required reserves increase $2.5 million, and excess reserves increase by $7.5 million. B. Actual reserves decrease by $10 million, required reserves decrease $2.5 million, and excess reserves decrease by $7.5 million. C. Actual reserves increase by $10 million, required reserves are unchanged, and excess reserves increase by $10 million. D. Actual reserves decrease by $10 million, required reserves decrease by $10 million, and excess reserves are unchanged.
If the government's goal is to alter people's behavior through taxation, taxing goods with relatively elastic demand and supply would be most effective.
Answer the following statement true (T) or false (F)