When the supply of real loanable funds is upward-sloping and the demand for real loanable funds is downward-sloping, an increase in the budget deficit causes aggregate demand to:
a. Rise by more than the deficit.
b. Rise by less than the deficit.
c. Rise by an amount more or less than the deficit, depending on the elasticity of supply and demand.
d. Fall by an amount less than the deficit.
e. Rise by an amount equal to the deficit.
.B
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The demand curve for low-skilled labor lies to the left of the demand curve for high-skilled labor because
A) there are more high-skilled workers than low-skilled workers. B) high-skilled workers require more compensation than low-skilled workers. C) high-skilled workers are more productive than low-skilled labor. D) firms do not see any difference between high-skilled labor and low-skilled labor.
Describe each of the following as a positive demand shock, a negative demand shock, a positive supply shock, or a negative supply shock, and specify how each are represented on the Phillips curve
a. a sudden increase in oil prices b. a large increase in spending on residential construction c. a sudden decrease in household wealth resulting from a stock market crash d. a substantial increase in productivity following technological advancements
In a monopolistically competitive market
A) firms are price setters. B) barriers to entry are high. C) firms earn positive economic profit in the long run. D) products are undifferentiated.
Herbert Simon, one of the first social scientists to combine the study of economics and psychology, suggested that humans should be viewed as
a. rational maximizers. b. satisficers. c. independent thinkers. d. signalers.