Reductions in the personal income tax, often advocated by supply-siders to increase labor supply and effort, can be expected to also
A. decrease consumption spending.
B. increase consumption spending.
C. decrease investment spending.
D. increase export sales.
Answer: B
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If inflation does not adjust rapidly in the short run, then when the Federal Reserve increases the nominal interest rate, the real interest rate in the short run will ________.
A. decrease B. be determined by saving and investment decisions. C. increase D. not change
Suppose Jack and Kate are at the town fair and are choosing which game to play. The first game has a bag with four marbles in it-1 red marble and 3 blue ones. The player draws one marble from the bag; if it is red, they win $20 and if it is blue, they win $1. The second game has a bag with 10 marbles in it-1 red, 4 blue, and 5 green. The player draws one marble from the bag; if it is red, they win $20; if it is blue, they win $5; and if it is green, they win $1. Both games cost $5 to play. Kate decides to play the second game. Kate's expected value of payoff is:
A. $5.00. B. $5.75. C. $4.50. D. $4.00.
Brian Vargo, an auto repair mechanic who remains unemployed because he refuses to work for less than $1,000 an hour, is:
a. counted as part of the labor force. b. considered frictionally unemployed. c. an underemployed worker. d. not counted as part of the labor force. e. considered as productively active.
Which of the following statements is true?
A) Monetarists believe that the government should be very involved in managing and directing the economy. B) Monetarists believe that the economy is self-regulating. C) There is very little difference between monetarist and Keynesian thought. D) Monetarists hold that velocity is constant. E) a and c