A supply shock causes the long-run aggregate supply curve to shift left, decreasing the price level
Indicate whether the statement is true or false
FALSE
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If employers are provided a subsidy of $1 per hour for hiring workers, ________
A) the equilibrium real wage will decrease B) labor demand will decrease C) the equilibrium employment will increase D) labor supply will increase
If there is no Ricardo-Barro effect, a government budget deficit increases
A) private savings and lowers the real interest rate. B) private savings and raises the real interest rate. C) the demand for loanable funds and raises the real interest rate. D) investment demand and lowers the real interest rate. E) the supply of loanable funds and raises the real interest rate.
The problem of _____ can arise when a seller cannot obtain reliable information from buyers
a. moral hazard b. adverse selection c. lemons problem d. incomplete information
Many economists argue that higher real interest rates in the United States (relative to foreign real interest rates) will lead to a(n) ________________ of the dollar and subsequent shifts in the U.S. AD curve and SRAS curve such that Real GDP will ___________________
A) depreciation; increase B) depreciation; decrease C) appreciation; increase D) appreciation; decrease