Which of the following is a long-run impact of an increase in the wage?
A. The quantity demanded of labor increases because there are no diminishing returns.
B. The quantity demanded of labor increases because the marginal revenue product curve shifts upward due to a higher product price.
C. The quantity demanded of labor decreases because firms face a higher degree of diminishing returns.
D. The quantity demanded of labor decreases because firms will have an incentive to use more of other inputs instead of labor.
Answer: D
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The aggregate supply curve
A) becomes vertical if there is excess production capacity within the economy. B) shows a negative relationship between the price level and real Gross Domestic Product (GDP). C) shows what each producer is willing and able to produce at each income level. D) relates planned aggregate production to price level.
The evolution of macroeconomic theory
A) usually precedes and causes major macroeconomic events. B) usually is in reaction to major macroeconomic events. C) is evenly divided between causing and reacting to major macroeconomic events. D) proceeds rather independently of major macroeconomic events.
The Employment Act of 1946 states that
a. the Fed should use monetary policy only to control the rate of inflation. b. the government should promote full employment and production. c. the government should periodically increase the minimum wage and unemployment insurance benefits. d. All of the above are correct.
Discouraged workers are classified by the BLS as
A) part of the labor force. B) not in the labor force. C) unemployed. D) employed. E) part-time employees.