Assume that a union representative argues that the social security tax is essentially paid for completely by the worker in the form of a lower wage equal to the amount of the tax
If this person were correct what is implicitly assumed to be the shape of the labor supply curve and why? Is this a reasonable assumption? Why or why not?
The implicit assumption is that the labor supply curve is perfectly vertical. That is workers will not change their labor supply decisions when wages change. This appears unlikely because it argues that workers do not respond to changes in incentives which appears unlikely.
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Credit histories allow firms to
A) identify high-risk borrowers, so they can be eliminated and interest rates kept down for others. B) increase the number of credit cards issued, and interest rates go up as a result. C) increase the number of credit cards issued, and interest rates go down as a result. D) lower the number of credit cards issued, and interest rates go up as a result. E) increase market power in the credit card industry, raising interest rates.
If the reserve ratio is 100-percent, then a new deposit of $1000 into a bank account
a. eventually increases the money supply by $1000. b. leaves the size of the money supply unchanged. c. eventually decreases the size of the money supply by $1000. d. eventually increases the money supply by $2000.