A temporary adverse productivity shock would
A) shift the labor supply curve upward.
B) decrease the level of employment.
C) decrease future income.
D) decrease the expected future marginal product of capital.
B
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Real GDP per person in Northland is $30,000, while real GDP in Southland is $10,000, However, Northland's real GDP per person is growing at 1 percent per year, and Southland's real GDP per person is growing at 3 percent per year. If these growth rates persist indefinitely, then:
A. Northland's real GDP per person will decline until it equals Southland's. B. Southland's real GDP per person will always be exactly 2 percent less than Northland's. C. Southland's real GDP per person will eventually be greater than Northland's. D. Northland's real GDP per person will always be between 1 and 2 percent greater than Southland's.
What is one reason car insurance seems much cheaper than health insurance?
A) Health insurance entails more idiosyncratic than systematic risk, and therefore the gains to diversification are more dramatic. B) Car insurance entails more systematic than idiosyncratic risk, and therefore the gains to diversification are more dramatic. C) Health insurance entails more systematic than idiosyncratic risk, and therefore there are fewer gains to diversification. D) Health insurance is manipulated through market power, and car insurance is not.
A price floor will be binding only if it is set a. equal to the equilibrium price
b. above the equilibrium price. c. below the equilibrium price. d. either above or below the equilibrium price.
A crowding-in effect occurs
A. When an increase in government spending leads to an increase in savings. B. When increased government borrowing reduces the quantity of funds that businesses can borrow. C. That increases investment each time government spending increases. D. When the increase in GDP caused by the increased government spending makes businesses see more investment projects as profitable.