An increase in aggregate demand will have most effect on prices if:
a) Aggregate supply is price inelastic
b) Aggregate supply is price elastic
c) Aggregate supply has a unitary price elasticity
d) Aggregate demand is price inelastic
Answer: a) Aggregate supply is price inelastic
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A) as small as possible; all B) equal; all C) equal; normal D) maximized; all
A decrease in the wage rate causes
A) a decrease in labor's productivity. B) a rightward shift of the firm's labor demand curve. C) a leftward shift of the firm's labor demand curve. D) an increase in the quantity of labor demanded.
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