Referring to the graph above, assume that, at first, the labor market is in equilibrium at point 4. In which scenario does unemployment rise, with no change in the quantity of employment?
A) real wage rises to the level of points 1 and 2
B) supply shifts to pass through point 5, with no change in the real wage
C) demand shifts to pass through point 3, with no change in the real wage
D) supply shifts to pass through point 3, with no change in the real wage
B
You might also like to view...
The table above gives the demand schedule for snow peas. The demand curve for snow peas is a straight line and so the elasticity of demand is
A) 1 at all prices. B) the same at all prices but not 1. C) higher at higher prices. D) lower at higher prices.
If increases in government spending lead to inflation, the value of the multiplier is reduced.
Answer the following statement true (T) or false (F)
Suppose the price of an item in a perfectly competitive market is $20. For a firm in this market, MC = MR at an output of 100 units. The average total cost at this output level is $4 per unit, and TVC is $800. We may conclude that
A. the firm should shut down because other firms will enter the industry as the market is perfectly competitive. B. the firm should continue to produce because P>AVC. C. the firm should shut down because its FC is $400 and its TC is $500. D. the firm should shut down because TC > TR.
The fact that the Phillips curve broke down during the 1970s means that aggregate demand has no effect on inflation.
Answer the following statement true (T) or false (F)