If there are powerful buyers in a labor market, the use of the supply-and-demand model to analyze labor markets
A. is inappropriate.
B. will cause you to believe the wage will be lower than it is.
C. is completely accurate.
D. will cause you to believe that fewer people will be hired than will be.
Answer: A
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Which of the following is most important in explaining exchange rate fluctuations in the short run?
A) relative price levels across countries B) relative rates of productivity growth across countries C) preferences for domestic and foreign goods D) interest rates
Suppose the equilibrium price of bread is $2.00 per loaf. If the government sets a price ceiling of $1.50 per loaf: a. the equilibrium price of wheat will fall and a shortage of wheat will be created. b. the quantity of wheat supplied will increase
c. the quantity of wheat demanded will decrease. d. there will be a shortage of bread.
If the aggregate supply curve shifts outward, then unemployment
a. and inflation will both decrease. b. and inflation will both increase. c. will increase and inflation will decrease. d. will decrease and inflation will increase.
One of the arguments supporting new classical theory is the policy ineffectiveness proposition (PIP)
Indicate whether the statement is true or false