An increase in the expected price level lead to
a. higher money wages and lower real wages.
b. higher money wages and real wages.
c. no change in money wages but lower real wages.
d. lower money wages and higher real wages.
B
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Economists assume people behave rationally, which means that people
A) never make a mistake. B) do not intentionally make decisions that make themselves worse off. C) have the necessary information to always make correct decisions. D) always understand the consequences of their decisions.
If demand price elasticity measures 2, this implies that consumers would:
a. buy twice as much of the product if the price drops 10 percent. b. require a 2 percent drop in price to increase their purchases by 1 percent. c. buy 2 percent more of the product in response to a 1 percent drop in price. d. require at least a $2 increase in price before showing any response to the price increase. e. buy twice as much of the product if the price drops 1 percent.
The money supply increased and the AD curve did not shift to the right. This is consistent with the
A) Keynesian transmission mechanism when there is either a liquidity trap or interest-insensitive investment. B) monetarist transmission mechanism when there is interest-insensitive investment. C) Keynesian transmission mechanism when there is a liquidity trap. D) monetarist transmission mechanism when there is a liquidity trap. E) c and d
The labor demand curve shows how many workers the firm is willing to hire
A. at any particular time. B. at a particular amount of labor supplied. C. at any given wage. D. when demand for the firm's output is low. E. into high-skill jobs.