Refer to Figure 17-3. Assume Panel B represents the labor supply curve. Which of the following statements about Panel B is true?
A) Panel B describes a situation in which the income effect dominates the substitution effect at every level of wages (segments i, ii, and iii).
B) Panel B describes a situation in which the income effect dominates the substitution effect at low wages (segment i) and a situation in which the substitution effect dominates the income effect at very high wages (segment iii).
C) Panel B describes a situation in which the income effect dominates the substitution effect at low wages (segment i) and again at very high wages (segment iii).
D) Panel B describes a situation in which the substitution effect dominates the income effect at low wages (segment i).
C
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If the government finances its spending by selling bonds to the central bank, the monetary base will ________ and the money supply will ________
A) increase; increase B) increase; decrease C) decrease; decrease D) not change; not change
Return to deficit after 2001 was due to
A) a drop in the revenue share. B) an increase in the expenditure share. C) both a drop in the revenue share and an increase in the expenditure share. D) recession.