Explain how labor unions may create structural unemployment
What will be an ideal response?
Labor unions, with their collective bargaining power, try to get wages for their members which are above the market clearing wage rate. These higher wages often result in employers hiring fewer workers than they otherwise could afford to hire or would like to hire, and structural unemployment results.
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Which of the following functions of money enables society to gain the benefits of geographic and labor specialization?
A. store of value B. unit of account C. medium of deferred payment D. medium of exchange
Which of the following is NOT one of the determinants of the gains of adopting a single currency?
A) A well-synchronized business cycle involving all member countries B) The possibility of factors of production to freely move across borders C) The willingness and ability of member countries to design policies to address regional imbalances that may develop D) Widening the common market by allowing other countries to join E) None of the above.
Maureen left her teaching job, which paid $30,000 per year, and invested $20,000 of her retirement fund (which was earning 10 percent interest) in a new real estate business. Her accountant predicted a $60,000 revenue the first year. Her husband, an economist, forecast her profit to be
A. $10,000. B. $28,000. C. $32,000. D. $60,000.
Figure 33-8
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In Figure 33-8, which of the following movements reflects the closing of an inflationary gap through the economy’s self-correcting mechanism?
A. A to B B. A to C C. C to E D. D to E