Answer the following statement(s) true (T) or false (F)
1. The major reason education leads to higher wages is due to signaling.
2. Attending college can be seen as an individual’s attempt to raise their level of human capital.
3. Since mowing ones lawn is not done at their workplace, it is viewed as a use of their leisure time and thus (somewhat paradoxically) falls into the category of leisure.
4. One deficiency of labor-leisure indifference curve analysis is that because indifference curves are always tangent to the worker’s budget line, the model can not explain why some people choose not to work.
5. A firm’s marginal revenue product of labor equals the marginal product of labor times the cost per unit of the labor.
1. False
2. True
3. True
4. False
5. False
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Shocks to long-run aggregate supply can be a source of business fluctuations ________
A) only in real business cycle models B) only in new Keynesian models C) in both real business cycle and new Keynesian models D) only if the money supply rises
A decrease in demand and a decrease in supply will lead to
A) unambiguous increases in both price and quantity. B) unambiguous decreases in both price quantity. C) an unambiguous decrease in price, but the effect on quantity is indeterminate. D) an unambiguous decrease in quantity, but the effect on price is indeterminate.
If the nominal interest rate is less than the rate of inflation, the real interest rate:
a. will be less than zero. b. will be equal to the nominal interest rate. c. will equal zero. d. will be greater than zero. e. will be equal to the rate of inflation.
Compared to a barter economy, using money increases efficiency by reducing
a. transaction costs. b. the need to exchange goods. c. the need to specialize. d. inflation.