Critics of the minimum wage argue that as an antipoverty device it is "poorly targeted." By this they mean that:
A. the minimum wage only applies to a small percentage of the labor force.
B. many who benefit from the minimum wage are teenagers or not poor.
C. the government has been unable to enforce the minimum wage.
D. the average level of wages in the economy is considerably higher than the minimum wage.
Answer: B
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When constructing the consumer price index, the Bureau of Labor Statistics does not do which of the following?
a. Try to include all the goods and services that the typical consumer buys. b. Try to weight the goods and services that the typical consumer buys according to how much consumers buy of each item. c. Survey consumers to determine what the typical consumer buys. d. Survey sellers to determine what the typical consumer buys.
One of the main functions of a country's monetary policy is to
A. monitor government spending. B. supervise the banking system. C. issue new currency. D. regulate the economy.
As the price level in the economy increases, which of the following sequence of events occur?
a) M^d (increase) --> r (inc) --> I (inc) --> AE (dec) b) M^d (dec) --> r (inc) --> I (inc) --> AE (inc) c) M^d (inc) --> r (inc) --> I (dec) --> AE (dec) d) M^d (dec) --> r (inc) --> I (dec) --> AE (dec)
Based on our understanding of the model presented in Chapter 3, we know that a reduction in c1 (where C = c0 + c1YD) will cause
A) the ZZ line to become steeper and a given change in autonomous consumption (c0 ) to have a smaller effect on output. B) the ZZ line to become steeper and a given change in autonomous consumption (c0 ) to have a larger effect on output. C) the ZZ line to become flatter and a given change in autonomous consumption (c0 ) to have a smaller effect on output. D) the ZZ line to become flatter and a given change in autonomous consumption (c0 ) to have a larger effect on output.