The cost of offering safe versus risky jobs in the highway construction industry vary across firms. In the end, we would expect the market equilibrium to
A. have firms that face a high cost of offering safe jobs to pay the lowest wages.
B. randomly match workers to jobs.
C. have firms randomly choose their level of safety.
D. match workers who dislike risk to the highest paying jobs.
E. match workers who dislike risk to firms that find it cheapest to offer safe jobs.
Answer: E
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In the Keynesian cross diagram, a decrease in investment spending because companies become more pessimistic about investment profitability causes the aggregate demand function to shift ________ and the equilibrium level of aggregate output to
________, everything else held constant. A) up; rise B) up; fall C) down; rise D) down; fall
The New Economy is one of
a. durable goods. b. services. c. information. d. manufacturing.
If a positive permanent supply shock were to occur, the resulting equilibrium would be a:
A. higher level of output and prices. B. lower level of output and prices. C. higher level of output at lower prices. D. lower level of output at higher prices.
Barter transactions involve a double coincidence of wants
a. True b. False Indicate whether the statement is true or false