When the minimum wage is set above the equilibrium market wage,
a. there will be a shortage of labor at the minimum wage
b. it will have no effect on the quantity of labor employed
c. the unemployment rate will rise
d. the quality of the labor force will increase
e. the unemployment rate will fall
C
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Suppose the Fed buys $1 million of government securities from Bank One, a large commercial bank. Bank One's reserves ________ and its deposits ________
A) increase by $1 million; do not change B) increase by $1 million; increase by $1 million C) do not change; increase by $1 million D) do not change; do not change E) decrease by $1 million; do not change
An increase in the demand for Treasury bills will
A) eventually cause households to hold less money. B) decrease the price of Treasury bills. C) increase the opportunity cost of holding money vs. Treasury bills. D) decrease the interest rate on Treasury bills.
What is the difference in the concepts of economic growth and economic expansion?
a. Both terms are used interchangeably and refer to quarterly increases in output. b. Economic growth refers to the long-tun upward trend in output over a longer period of time, usually more than a decade, which is measured as the average annual change in output over the period. An expansion refers to a shorter time period during which output increases quarter by quarter or year by year. c. An expansion refers to the long-tun upward trend in output over a longer period of time, usually more than a decade, which is measured as the average annual change in output over the period. Economic growth refers to a shorter time period during which output increases quarter by quarter or year by year. d. Both terms are used interchangeably and refer to the long-tun upward trend in output over a longer period of time, usually more than a decade, which is measured as the average annual change in output over the period. e. Economic growth is the term reserved for periods of prosperity in less developed countries while expansion is the term reserved for developed industrial countries.
If you as a lender want an increase in purchasing power of 4 percent from making a loan and you set the nominal interest rate at 9 percent, then your
A. real rate of interest is 13 percent. B. expected rate of inflation is 5 percent. C. expected rate of inflation is 13 percent. D. real rate of interest is 36 percent.