Suppose the wage rate in a certain industry rises, and firms hire fewer workers. The best explanation of this is that labor:
A. demand fell.
B. demand increased.
C. supply fell.
D. supply increased.
Answer: C
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If the public believes that the commitment to a nominal anchor is not credible, the effect of a positive aggregate demand shock is for ________
A) short-run aggregate supply to shift down B) short-run aggregate supply to remain unchanged C) short-run aggregate supply to shift up D) inflation, but not economic activity, to increase
Which of the following is a possible reason for governments to regulate business operations?
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