In the classical model,
A) unemployment will never exist since workers will be willing to accept lower wages and will then be able to find work.
B) unemployment will never exist because employers will be willing to pay the wage rate demanded by the workers.
C) wages will go up but never go down.
D) full employment will never be reached.
A
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The "income effect" in the market for aspirin means that
A) aspirin are generally taken by people with higher than average incomes. B) a decrease in the price of a substitute good like acetaminophen will make aspirin takers feel a little poorer than they were before. C) an increase in the price of aspirin will reduce the total purchasing power of aspirin takers, making them able to afford fewer aspirin. D) an increase in the price of aspirin will cause headache sufferers to look for a lower priced remedy.
The gravity model explains why
A) trade between Sweden and Germany exceeds that between Sweden and Spain. B) countries with oil reserves tend to export oil. C) capital rich countries export capital intensive products. D) intra-industry trade is relatively more important than other forms of trade between neighboring countries. E) European countries rely most often on natural resources.
The three approaches to measuring economic activity are the
A) cost, income, and expenditure approaches. B) product, income, and expenditure approaches. C) consumer, business, and government approaches. D) private, public, and international approaches.
A net capital inflow occurs in open economies where investment is:
A. higher than national savings. B. equal to national savings. C. lower than national savings. D. higher than national spending.