The sticky-wage theory of the short-run aggregate supply curve says that when the price level is lower than expected,
a. relative to prices wages are higher and employment rise.
b. relative to prices wages are higher and employment falls.
c. relative to prices wages are lower and employment rises.
d. relative to prices wages are lower and employment falls.
b
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When the price of a good changes, the amount of that good that buyers wish to buy changes:
A. solely because of the substitution effect. B. only if the substitution effect and the income effect do not cancel out each other. C. because of both the substitution and the income effects. D. solely because of the income effect.
A consumer has $100 to be spent on tables and chairs. If his income increases to $200, the prices of the goods remaining unchanged, his budget constraint:
A) pivots to the left along the vertical axis. B) pivots to the right along the horizontal axis. C) shifts to the left. D) shifts to the right.
The failure of private incentives to provide adequate maintenance of public resources leads to the tragedy of the commons
a. True b. False Indicate whether the statement is true or false
If nominal GDP is $10 trillion and real GDP is $12 trillion, then the GDP deflator is
a. 83.33, and this indicates that the price level has decreased by 16.67 percent since the base year. b. 83.33, and this indicates that the price level has increased by 83.33 percent since the base year. c. 120, and this indicates that the price level has increased by 20 percent since the base year. d. 120, and this indicates that the price level has increased by 120 percent since the base year.