Assuming the economy is experiencing a recessionary gap, classical economists predict that:
A. wages will remain fixed.
B. monetary policy will sell government securities.
C. higher wages will shift the short-run aggregate supply curve leftward.
D. lower wages will shift the short-run aggregate supply curve rightward.
Answer: D
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BioMed Pharmaceutical has held a patent on an important heart medication called Heartex, but the patent will expire in the coming year. After the patent expires, other firms can legally sell the same medication as a generic drug product
What will happens to the demand for Heartex and to the Lerner index for this product as the generic drugs enter the market? A) Demand becomes less elastic, Lerner index increases B) Demand becomes less elastic, Lerner index declines C) Demand becomes more elastic, Lerner index increases D) Demand becomes more elastic, Lerner index declines
Which of the following is true of the tax and transfer programs of the United States?
a. Tax-transfer programs persistently redistribute income from the rich to the poor. b. Social Security, the largest transfer program, redirects income toward the elderly, a group with above-average levels of both income and wealth. c. The bulk of agriculture subsidies go to large farmers with above-average incomes. d. Taxes generally take a larger share of the income of the poor than is true for those with higher incomes. e. Both b and c are true.