Moving along the potential GDP line, when the price level changes, the
i. real wage rate stays at the full-employment equilibrium level.
ii. money wage rate changes by the same percentage.
iii. money prices of non-labor resources change by the same percentage.
A) i only B) ii only C) iii only D) i and ii E) i, ii, and iii
E
You might also like to view...
Consider a monopolist who charges a single price to all of its customers. If this monopolist starts price discriminating, its output will ________ and its profit will ________.
A. rise; fall B. rise; rise C. fall; rise D. fall; fall
Aggregate demand is the sum of total domestic spending by the private sector.
Answer the following statement true (T) or false (F)
Answer the following statements true (T) or false (F)
1. The circular flow of income does not take into consideration nonprofit institutions. 2. The total payment of resource income in the economy is equal to the value or cost (including profit) of the output. 3. GDP is not only the value of total output, but it also indicates the total spending of consumers, businesses, governments, and international traders on these goods and services. 4. The circular flow represents the total level of output and income. 5. In the circular flow, services rendered by the resource owners are compensated through payments of wages, rent, interest, and profits.
In the electric guitar market, the quantity demanded is significantly greater than the quantity found at the bottom of the LRAC. Given this information, which of the following will likely occur?
a. Multiple firms will compete in the electric guitar market. b. One firm will manufacture and sell electric guitars. c. Most electric guitar firms will experience diseconomies of scale. d. A monopoly will form in the electric guitar industry.