If the price level rises by 3 percent and workers' money wages increase by 3 percent, then the
A) quantity of labor demand will decrease.
B) quantity of labor demand will increase.
C) quantity of labor demanded does not change because there is no change in the real wage rate.
D) Any of the above could occur depending on the magnitude on the dollar increase in the price level versus the dollar increase in the wage rate.
C
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If workers demand and receive higher real wages (a successful wage push), the cost of production ________ and the short-run aggregate supply curve shifts ________
A) rises; leftward B) rises; rightward C) falls; leftward D) falls; rightward
In the 1970s, long lines at gas stations in the United States were primarily a result of the fact that
a. OPEC raised the price of crude oil in world markets. b. U.S. gasoline producers raised the price of gasoline. c. the U.S. government maintained a price ceiling on gasoline. d. Americans typically commuted long distances.
Based on the graph showing a contractionary policy response to a negative supply shock, a decrease in aggregate demand leads to ______.
a. increased inflation and decreased unemployment
b. increased output and prices, and decreased unemployment
c. decreased output and prices, and increased unemployment
d. increased output and increased prices
The cyclically adjusted deficit as a percentage of GDP is 2 percent in year 1. This deficit becomes 1 percent of GDP in year 2. It can be concluded from year 1 to year 2 that:
A. fiscal policy was expansionary. B. the federal government is increasing spending. C. the federal government is decreasing taxes. D. fiscal policy was contractionary.