The labor supply curve starts to bend backward once the
A. Marginal revenue product of labor equals the marginal utility of leisure.
B. Substitution effect exceeds the income effect.
C. Income effect exceeds the substitution effect.
D. Total utility of leisure outweighs the total utility of labor.
Answer: C
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When there is an expansionary gap, inflation will ________, in response to which the Federal Reserve will ________ real interest rates, and output will ________.
A. decline; lower; expand B. increase; raise; decline C. decline; lower; decline D. decline; raise; decline
Refer to Table 19-21. Consider the following data for a simple economy: Calculate nominal GDP and real GDP for 2016, using 2014 as the base year. Show your work
What will be an ideal response?
Inrecent years in China, the fraction of the population living below the international poverty line ($1.25 per person per day):
A. fell substantially. B. increased dramatically. C. increased more on average compare toother developing countries. D. fell to zero.
A deficit nation in a fixed exchange rate system can improve its balance of payments by increasing
A. its money supply. B. its interest rates. C. its level of real GDP. D. aggregate demand.