A monopsonist will hire fewer workers at a lower wage rate than would prevail in a competitive market.
Answer the following statement true (T) or false (F)
True
The intersection of the marginal factor cost and a labor demand curve (marginal revenue product) indicates the quantity of labor a monopsonist will want to hire. It will pay a wage based on the labor supply curve. In the absence of market power, an employer would end up at the competitive equilibrium where labor demand is equal to labor supply, paying a higher wage and employing more workers.
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Suppose on any given day there is an excess demand of reserves in the federal funds market
If the Federal Reserve wishes to keep the federal funds rate at its current level, then the appropriate action for the Federal Reserve to take is a ________ open market ________, everything else held constant. A) defensive; sale B) defensive; purchase C) dynamic; sale D) dynamic; purchase
In a simple circular-flow diagram, firms use the money they get from a sale to
a. pay wages to workers. b. pay rent to landlords. c. pay profit to the firms' owners. d. All of the above are correct.
An elasticity of demand that would be considered very inelastic would be
A. 0.1. B. 0.9. C. 1.0. D. 1.1.
Proponents of the policy irrelevance proposition believe that, under the assumption of rational expectations, the unemployment rate will
A. go up whenever the Fed announces an anticipated monetary policy change. B. equal the natural rate of unemployment in the long run, regardless of any monetary policy actions. C. always be higher in the long run than the natural rate of employment. D. go down whenever the Fed announces an anticipated fiscal policy change.