In the quantity equation, the total output of the economy Y is used instead of transactions T because:
A. income is harder to measure than transactions.
B. transactions are harder to measure than income.
C. transactions grow at a faster rate than income.
D. transactions grow at a slower rate than income.
Ans: B. transactions are harder to measure than income.
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The unemployment caused by minimum wage would be larger if
A) both labor demand and labor supply are more elastic. B) both labor demand and labor supply are more inelastic. C) minimum wage is set equal to the equilibrium wage rate. D) minimum wage is set below the equilibrium wage rate. E) both labor demand and labor supply are perfectly inelastic.
A "war on drugs" is waged, and, as a result, a larger quantity of drugs flowing into the United States is seized and more drug traffickers are arrested. If demand for drugs is inelastic, one would expect the total expenditure on drugs to: a. decrease
b. increase. c. stay constant. d. There is not enough information available to make a determination.