If the reserve ratio is 100 percent, the value of the monetary multiplier is:
A. 0.
B. 1.
C. 10.
D. 100.
B. 1.
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The assumption that in the long run prices and wages are fully flexible implies that the long-run aggregate supply curve is determined by ________
A) capital and labor inputs B) technology C) the natural rate of unemployment D) all of the above E) none of the above
Classical economists suggest that unemployment is a short-lived phenomenon because
A) wages adjust quickly to equilibrate quantity of labor demanded with quantity of labor supplied. B) wages remain unchanged when the quantity of labor demanded exceeds the quantity of labor supplied. C) wages remain unchanged when the quantity of labor supplied exceeds the quantity of labor demanded. D) wages tend to rise slowly when the quantity of labor demanded equals the quantity of labor supplied.
We know that products G and H are related goods, because when the price of G increases,
A) the demand curve for H will shift to the right, because G and H are complementary goods. B) the quantity of H demanded will shift along its demand curve, because G and H are complementary goods. C) the demand curve for H will shift to the left, because G and H are complementary goods. D) the demand curve for H will remain unchanged because G and H are substitute goods.
The substitution effect shows that when the wage rate increases
a. an additional hour of labor is not worth pursuing. b. an additional hour of leisure is now less costly in terms of foregone consumption. c. an additional hour of leisure is now more expensive in terms of foregone consumption. d. there will be intertemporal substitution.