Answer the following statements true (T) or false (F)
1. The relationship between the price of a book and the number of volumes purchased would be an example of microeconomics.
2. Some economic principles are based on physical phenomena.
3. If I stand up at a football game, I can see better. But if we all stand up, we block each other’s view. This is an example of the fallacy of composition.
4. The basic function of any economic system is to provide the framework for allocating scarce resources in a way that adequately satisfies unlimited wants.
1. TRUE
2. TRUE
3. TRUE
4. TRUE
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If workers' money wage rates increase by 5 percent and the price level remains constant, workers'
A) quantity of labor supplied will decrease. B) quantity of labor supplied will increase. C) quantity of labor supplied will not change. D) demand for jobs will decrease.
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