In a labor-market pooling equilibrium with high-skill and low-skill workers and where a costly educational degree is used as a signaling device,
A) the high-skill workers' wage is larger than the low-skill workers' wage.
B) the low-skill workers' wage is zero.
C) the high- and low-skill workers receive the same wage.
D) the high-skill workers' wage is equal to the low-skill workers' wage plus the cost of obtaining a degree.
C
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Why do some economists think that taxing capital gains results in a locked-in effect?
What will be an ideal response?
In the monetarist model, an autonomous increase in investment demand would have
a. only a weak effect on the level of output. b. a strong positive effect on the level of output. c. no effect on the interest rate. d. stronger effects on output if financed with increases in the money supply. e. both a and d.
If people take into account the expected behavior of fiscal and monetary authorities in forecasting the behavior of inflation rates, they are most likely forming their projections using
A. adaptive expectations. B. contractionary expectations. C. inflationary expectations. D. rational expectations.
As the real interest rate decreases, the quantity of saving supplied ________ and the quantity of saving demanded ________.
A. decreases; increases B. does not change; does not change C. increases; decreases D. increases; increases