Which of the following is not true about the wage level in a bilateral monopoly?
A. It is determined by supply and demand.
B. It is below the wage where the marginal factor cost curve intersects the labor demand curve.
C. It is above the wage level where the marginal wage intersects the labor supply curve.
D. It is determined by negotiation.
Answer: A
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The "standard of deferred value" function of money means it is:
a. Unit in terms of which everything is valued and the basis for establishing relative prices between goods and services. b. Asset people can use to accumulate wealth. c. Barter value of a product for which a nation has a comparative advantage. d. Asset individuals get for goods and services and then use later to purchase other goods and services. e. The unit in terms of which people write contracts.
Suppose money supply (M) = $500, price level (P) = 2, and real GDP (Y) = $1,000. Calculate the value of velocity using the equation of exchange.
A) 1 B) 2 C) 4 D) 5
The main reason why one nation trades with another is to
A. save its natural resources from rapid depletion. B. exploit the advantages of specialization. C. eliminate the danger of retaliation from other nations. D. improve political alliances.
The economy is at equilibrium at point C which is below potential output. What fiscal policy would increase real GDP?
Refer to the figure above.
A. Shift aggregate demand by increasing taxes
B. Shift aggregate demand by decreasing transfer payments
C. Shift aggregate demand by decreasing government spending
D. Shift aggregate demand by increasing transfer payments