Competition reduces some but not all discrimination. Where can one expect competition to reduce discrimination, and where is discrimination likely to go on even if there is competition?
Competition reduces the employer's ability to restrict hiring to only preferred races or genders, since the reduced supply increases wages and makes the firm unable to match competitor prices. But discrimination within the firm by fellow workers need not be eliminated by competitive forces. If workers are less cooperative for supervisors of a certain race or sex, these supervisors will not be successful. Also, statistical discrimination may remain. Imperfect information leads to lower wages for women because of the higher probability of time off to have children. Women who do not intend to take time off may not be able to differentiate themselves to the employer.
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The price of reserves that are borrowed from the Federal Reserve is called the
A) discount rate. B) federal funds rate. C) LIBOR. D) prime rate.
Human capital consists of the skills and knowledge that workers possess
a. True b. False
In Cuba, all the economic decisions are taken by the government. This implies that Cuba has a _____
a. command economy b. market-oriented economy c. barter economy d. mixed economy
An increase in aggregate demand in the long run, will change:
A. both output and the price level. B. output but not price level. C. neither output nor the price level. D. the price level but not output.