In the above figure, if the budget line is originally line DE and the price of coffee decreases, the consumer will
A. drink more coffee and increase bagel consumption slightly.
B. drink more coffee and decrease bagel consumption slightly.
C. drink less coffee and increase bagel consumption slightly.
D. leave consumption of both coffee and bagels unchanged.
Answer: A
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Government regulations that increase the cost to the employer of hiring workers will:
A. increase the supply of labor. B. increase the demand for labor. C. decrease the supply of labor. D. decrease the demand for labor.
Desirable characteristics for money do not include
a. divisibility b. portability c. durability d. not being of uniform quality e. a stable supply
A study of countries with high inflation rates indicates that the inflation is generally
a. caused by strong labor unions. b. the result of restrictive macroeconomic policy, which pushes up interest rates. c. caused by supply shocks. d. the result of rapid growth in the money supply.
Consider the following three items of spending by the government: (i) the federal government pays a $500 unemployment benefit to an unemployed person; (ii) the federal government makes a $2,000 salary payment to a Navy lieutenant; (iii) the city of Bozeman, Montana makes a $10,000 payment to ABC Lighting Company for street lights in Bozeman. Which of these payments contributes directly to
government purchases in the national income accounts? a. only item (i) b. only item (ii) c. only items (i) and (ii) d. only items (ii) and (iii)