According to the AS/AD model, a reduction in the money supply is appropriate:
A. when saving equals investment.
B. when saving is greater than investment.
C. whatever the level of saving and investment.
D. when saving is less than investment.
Answer: D
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A specific tariff provides home producers more protection when
A) the home market buys cheaper products rather than expensive products. B) it is applied to a commodity with many grade variations. C) the home demand for a good is elastic with respect to price changes. D) it is levied on manufactured goods rather than primary products. E) the home supply outnumbers the foreign imports.
There is a clear consensus among economists that unions are
a. good for the economy because they result in higher wages for most workers. b. good for the economy because they are a necessary antidote to the market power of employers. c. bad for the economy because they are cartels and therefore detrimental to an efficient allocation of resources. d. None of the above is correct; there is no clear consensus among economists about whether unions are good or bad for the economy.
When Javier's income increases by $5,000, he spends an additional $3,750 dollars. This implies that his marginal propensity to consume is 0.75
Indicate whether the statement is true or false
When a firm has a monopoly in a market and also perfectly price discriminates, total welfare
A) is maximized. B) is lower than in a perfectly competitive market. C) is higher than in a perfectly competitive market. D) is minimized.