Assume that the marginal propensity to consume in an economy is 0.9. If the economy's full-employment real GDP is $500 billion and its equilibrium real GDP is $550 billion, there is an inflationary expenditure gap of

An example of a capital good is

A) a fiber optic cable TV system. B) an insurance policy. C) a haircut. D) an iPod. E) a slice of pizza.

Suppose the market-clearing wage for pizza delivery workers is $7.00 per hour, but a $10.00 per hour minimum wage is enacted. Other things constant, the higher minimum wage tends to

A) increase the supply of pizza delivery workers. B) decrease the quantity demanded of pizza delivery workers. C) create a shortage of pizza delivery workers. D) accomplish all of the above. E) accomplish none of the above.