What are the two meanings of interest in economics?
What will be an ideal response?
Interest refers to the price paid by debtors to creditors for the use of funds and refers to the market return earned by capital as a factor of production.
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As a result of the rightward shift in the demand curve for labor from LD0 to LD1, the equilibrium level of employment ________ and potential GDP ________
A) increases; increases B) increases; decreases C) decreases; increases D) decreases; decreases
A union will try to increase employment for its members as long as the marginal wage is positive.
Answer the following statement true (T) or false (F)
A rise in the price of a bond causes the yield of the bond to
A. rise. B. fall. C. remain unchanged. D. rise if it's a short-term bond, fall if it's a long-term bond.
Consider the market for bicycles. If a dealer cuts prices by 10 percent and sells 20 percent more bikes, then demand for bicycles is
a. inelastic, and total revenue will increase. b. elastic, and total revenue will increase. c. inelastic, and total revenue will decrease. d. elastic, and total revenue will decrease.