In a recessionary gap, the implications of downward wage inflexibility are that there will be
A) further leftward shifts of AD that worsen unemployment.
B) no further leftward shifts of AD, allowing the shifts in SRAS to close the recessionary gap.
C) no further leftward shifts of SRAS, allowing the shifts in AD to close the recessionary gap.
D) no rightward shifts of SRAS, allowing for the possibility of persistent high unemployment.
D
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The price ceiling depicted in the above figure results in
A) consumer surplus increasing from $30 thousand to $34.5 thousand. B) producer surplus decreasing from $24 thousand to $6 thousand. C) a deadweight loss of $16 thousand. D) Both answers A and B are correct.
The production function is concave in labor because
A) the contribution to production of each additional unit of labor decreases. B) the marginal product of labor is increasing. C) the marginal product of capital is decreasing. D) the labor demand is downward sloping.
If the social value of producing robots is greater than the private value of producing robots, the private market produces too few robots
a. True b. False Indicate whether the statement is true or false
Which of the following is an example of a normative, as opposed to positive, statement?
a. The growth rate of the economy last year was higher than any other year in the last decade. b. The federal government reduced spending in the last quarter of the fiscal year. c. The Federal Reserve Bank adjusted interest rates in response to the lower-than-expected growth rate of the economy. d. The federal government should decrease unemployment benefits to stimulate the economy out of the recession.