Is there a positive or negative relationship between real wages and output in the classical model? Explain
What will be an ideal response?
The answer depends upon whether labor supply or labor demand is shifting. If an increase in output is caused by an increase in labor supply, then there is a negative relationship between real wages and output. If an increase in labor demand causes the increase in output, then real wages and output are positively related.
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A brand name may contribute to oligopolists' economic profit by
a. shifting the demand curve leftward b. shifting the supply curve leftward c. overcoming economies of scale d. acting as a barrier to entry e. reducing advertising costs
The behavior of the M1 velocity of money in recent years can be explained by: a. stability of interest rates
b. a low and stable rate of inflation. c. monetary policy that has been successful in stabilizing the economy. d. financial innovation creating new substitutes for M1 money. e. a large number of banks and savings and loan associations going bankrupt.
Economists concerned about economy-wide trends in the unemployment of labor, the rate of inflation, and the level of economic production are studying:
A) microeconomics. B) macroeconomics. C) specific units or parts of the economy. D) the "trees" of economic behavior, rather than the "forest."
The main reason for holding _______ instead of ______ is that _______ is (are) useful for buying things.
a) bonds; money; bonds b) demand deposits; currency; demand deposits c) currency; demand deposits; currency d) money; interest-bearing assets; money e) interest-bearing assets; money; interest-bearing assets