If the Fed sells government bonds on the open market, which of the following is likely to occur?
A. The money supply will expand.
B. The market rate of interest on government bonds will increase.
C. The market rate of interest on corporate bonds will decrease.
D. The amount of investment spending will increase.
B. The market rate of interest on government bonds will increase.
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The Bubby Gum factory produces bubble gum. Joanne is one of the employees, and she produces 10 packs of bubble gum per hour. Joanne's money wage rate is $12 per hour. Based on this information, the Bubby Gum company should
A) fire Joanne because she creates a loss for the firm. B) increase its demand for labor. C) decrease Joanne's wage rate because she is paid too much. D) keep Joanne because she creates a profit for the firm. E) None of the above answers is correct because more information about Joanne's real wage is needed to decide what to do.
Duke increased his spending on steak from $7 to $11 per week because of a 12 percent salary increase, so his
A) income elasticity of demand for steak is 1.37. B) price elasticity of demand for steak is 1.37. C) income elasticity of demand for steak is 3.7. D) price elasticity of demand for steak is 3.7.