question
Suppose that the federal government implements a minimum wage of $20 and that unskilled labor in Fargo is typically $10 per hour. Which of the following is true?
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C. Employment of unskilled labor in Fargo will fall.
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an economic good to exist
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a. there must be a human need
b. it must have the properties that render the good able to be brought into casual connection with the satisfaction of the need
c. there must exist human knowledge of the casual connection
d. a human must have command of the good sufficient to direct it to the satisfaction of such a need
e. all of the above
b. it must have the properties that render the good able to be brought into casual connection with the satisfaction of the need
c. there must exist human knowledge of the casual connection
d. a human must have command of the good sufficient to direct it to the satisfaction of such a need
e. all of the above
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the value of an intermediate good:
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B. Depends upon it's ability to contribute to a final good demanded by consumers
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prices
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A. communicate information
B. reflect the cost of supply and people's willingness to pay for goods to which prices are attached (demand)
D. a and b
B. reflect the cost of supply and people's willingness to pay for goods to which prices are attached (demand)
D. a and b
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Entrepreneurs
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A. Attempt to make profitable use of capital
B. attempt to buy goods at a low price and sell them at a high price
C. aim to shape the world around them such that they are more pleased with the outcome
d. all of the above
B. attempt to buy goods at a low price and sell them at a high price
C. aim to shape the world around them such that they are more pleased with the outcome
d. all of the above
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to be rational is to:
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make decisions in light of available information that is interpreted by theory one believes to be correct
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the price of peanut butter increases. what is the effect on the market for peanut butter and jelly?
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b-supply shifts left
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an earthquake causes an oil refinery to catch fire. what is the effect on the oil market?
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b-supply shifts left
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people decide to use more gas. show the effect of this market for gas
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d-demand shifts right
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given the price change in the previous question. what can we expect to see in the market for electric cars?
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d-demand shifts right
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government initiates a subsidy for producing ethanol gas with corn. show the effect on the corn market.
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c-supply shifts right
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donald trump announces that the united states will engage in open cyber war with russia. what is the effect on the market for hackers?
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d-demand shifts right
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oats are adopted as money and farmers immediately develop technology to produce them more efficiently.
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e-demand and supply shift right
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the purchasing power of money
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A. is the only price of money
B. represents the price of money in exchange on average
B. represents the price of money in exchange on average
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the product of M and V represent:
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total expenditures
aggregate demand
the demand side of the equation of exchange
aggregate demand
the demand side of the equation of exchange
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in the long run, the effect of an increase in the money stock
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c- is self reversing
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the state created the first money
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false
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according to says principle, demand creates its own supply
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false
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if there exists an excess demand for money at given prices, then there also exists an excess demand for goods
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false
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money first arose because of a need for a unit of account
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false
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the first commodity money will likely become money without the intention of the market participants who used it
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true
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the law of one price is promoted by arbitrage
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true
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if bill gates tech guru and worlds richest man is the fastest typist in the world, then he should specialize in typing
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false
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in the loanable funds market, the quantity of savings provided and quantity of investment demanded
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C. are made equal by adjustments in the rate of interest
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time-preference is
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C. a persons preference for present gain over future gain
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if people decide to save more money, all else will equal
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B. interest rates will fall
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if people decide to borrow money, all else will equal
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A. interest rates will rise
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if the government increases the amount of money it is borrowing, the effect will be to
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D. lead to an increase in interest rates
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if the federal reserve expansion of the money stock increases the observed inflation above the expected rate of inflation, the logic of the phillips curve implies that
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C. unemployment will decrease temporarily
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base money is the only form of money in the economy
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false
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fractional reserve banking prevents the multiplication of the money stock
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false
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if the reserve ratio is 1% the money multiplier is 10
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false
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the purchase of government treasuries by a private party represents a form of saving
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true
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the federal reserve shrinks the money stock when it purchases government securities
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false
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a bank that is insolvent could repay its debts given enough time
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false
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predictable monetary policy is bad for economic growth
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false
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rational and adaptive expectations are equivalent descriptions of human action
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false
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disinflation always occurs when the inflation rate is negative
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false
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the federal reserve attempts to reduce unemployment by a lower rate of growth of the money stock
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false
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the natural rate of unemployment includes
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frictional and structural unemployment
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an individuals marginal tax rate is 10%. if the average tax rate of the same individual is 5%, we can expect that
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c. the average tax rate will rise for each additional dollar earned
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an income tax whose rate remains the same as income grows is called a
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d. flat tax
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those income earners in the united states who are in the bottom quintiles
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pay the lowest rate and the lowest share of federal taxes
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the largest area of us federal spending comes from
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social security
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the country that spends the most on military
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us
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the deficit of the federal government is
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the amount of government spending each year that is not covered by taxes
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an increase in govt expenditure will
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none of the above
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ricardian equivalence is the claim that
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taxpayers expect to pay higher taxes in the future when govt finances spending and govt expenditures are perfectly offset by a fall in C and I
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when the govt borrows money the interest rate rises. this leads to
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a fall in private investment and a rise in savings
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in order for the govt spending to be effective in fighting recession, policy makers must
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A. successfully identify the source of economic disturbance
b. pass an effective proposal in a timely manner
c. quickly and successfully revise the implemented program if necessary
b. pass an effective proposal in a timely manner
c. quickly and successfully revise the implemented program if necessary
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unemployment insurance is
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an automatic stabilizer and may discourage employment
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especially high levels of govt debt relative to gdp can
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b. encourage capital flow out of a country
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when central banks joined the gold standard, demand for silver
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c. fell
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under the gold standard, non-monetary uses for gold compete with monetary uses
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true
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the invention of the cyanide process was partly the result of
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a relative high price of gold
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during world war 1
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the price level rose even in gold standard countries and most nations that were on the gold standard abandoned the gold standard
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greshams law says that
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bad money drives out good money
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an increase in the quantity of gold will tend to
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lower the value of gold
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monetary expansion will not affect the value of a currency if the new money is used for government spending
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falso
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