A firm that discriminates against black labor will certainly
A. hire no workers.
B. hire all black workers.
C. earn less profit than it could earn if it did not discriminate.
D. hire all white workers.
E. hire a mix of black and white workers.
Answer: C
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The Great Depression that started in 1929 was
A) confined only to the United States. B) confined only to the United States and Britain. C) confined only to the United States and Europe. D) a global phenomenon. E) confined only to the Americas.
When the Federal Reserve System was created in 1913, it was designed to
A) play the role of a passive service agency. B) stabilize the economy through the use of open market operations. C) collect taxes for the federal government. D) mint new gold and silver coins.
Suppose that the cost of living is 25 percent higher in Chicago than in Indianapolis. If wages in Chicago are 10 percent higher on average than wages in Indianapolis, then eventually the labor supply will
a. fall in Indianapolis, increasing the average wage there b. fall in Chicago, increasing the average wage there c. rise in Indianapolis, increasing the average wage there d. rise in Chicago, decreasing the average wage there e. fall in Indianapolis, decreasing the average wage there
The argument advanced by Milton Friedman for adopting a monetary growth rule is that
A) active monetary policy potentially destabilizes the economy. B) the Fed can control the money supply, but not the level of interest rates. C) a constant rate of growth in the money supply would eliminate the booms and recessions that make up the business cycle. D) the growth rate of M1 has been unstable.