According to the permanent income hypothesis, the impact of ________
A) a change in permanent income on consumption is greater than the impact resulting from a change in transitory income
B) a change in transitory income on consumption is greater than the impact resulting from a change in permanent income
C) a change in transitory income is felt primarily through changes in the total tax revenue paid to the federal government
D) a change in permanent income on consumption is larger than the impact resulting from a change in future income
A
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The above figure shows the market for biologists. The government decides to set a minimum wage for biologists of $18 per hour. After this minimum wage is in effect, the firms' surplus equals ________
A) $800 B) $900 C) $1,800 D) $400 E) $200
Suppose that the economy begins at a long-run equilibrium. Which of the following raises the price level and decrease real GDP in the short run?
A) a decrease in the quantity of money B) an increase in the price of oil that decreases aggregate supply C) an increase in the stock of capital that increases aggregate supply D) an increase in government expenditures