If labor productivity increases
A) labor costs rise by equal increments.
B) the demand for labor increases.
C) some workers will be laid off.
D) jobs will relocate.
B
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The tax multiplier is calculated as 1 / (1 - b)
Indicate whether the statement is true or false
All homothetic goods are normal goods.
Answer the following statement true (T) or false (F)
Which of the following statements is true?
A) Under monopoly, the seller sets the price of its good below marginal costs. B) Under perfect competition, sellers set the price of their goods below marginal costs. C) Under monopoly, prospective buyers may not be able to buy a good even if they have a willingness to pay above marginal costs. D) Under perfect competition, prospective buyers may not be able to buy a good even if they have a willingness to pay above marginal costs.
The costs imposed by inflation should be lessened in the future because of the following reform that took place during the early 1980s
A) airline deregulation. B) issuance of indexed government bonds. C) changing tax laws to ensure that savers are taxed only on real, rather than nominal capital gains. D) lifting of limits on interest paid on checking and savings accounts.