Assuming the economy is in a recession, Keynesian economists predict that:
a. wages will remain fixed
b. monetary policy will sell government securities.
c. higher wages will shift the short-run aggregate supply curve leftward.
d. lower wages will shift the short-run aggregate supply curve rightward.
a
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All of the following are incomes earned in the factor market EXCEPT
A) wages. B) prices of goods and services. C) rents. D) profits.
A legal system that protects private property and enforces contracts in an even-handed manner helps promote economic growth because it
What will be an ideal response?
Which of the following is not an accurate summary of the equilibrium associated with a single competitive labor market?
A. Firms receive surplus equal to the area above the wage rate and below the demand for labor. B. Total economic surplus is maximized. C. Total firm surplus equals total worker surplus. D. All workers are paid the same market-clearing wage. E. Workers receive surplus equal to the area below the wage rate and above the supply of labor.
You are the mayor of your home town, and one day you arrive at city hall to find angry voters demonstrating against you. They are mad because your office created a garbage-collection monopoly by awarding only one company a permit to collect garbage in your town. The voters claim that the company is overcharging and providing poor service. They want you to do something that will lower rates and improve service. You call your staff economist, who presents evidence that there are substantial economies of scale to garbage collection. What are your options if you are interested in efficiency?
What will be an ideal response?