Unions
a. and firms paying wages above equilibrium to improve worker effort both create frictional unemployment.
b. create frictional unemployment, while firms paying wages above equilibrium to improve worker effort create structural unemployment.
c. create structural unemployment, while firms paying wages above equilibrium to improve worker effort create frictional unemployment.
d. and firms paying wages above equilibrium to improve worker effort both create structural unemployment.
d
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In long-run equilibrium, a competitive firm can earn zero profit only if its technology exhibits
a. increasing returns to scale. b. decreasing returns to scale. c. constant returns to scale. d. regressive returns to scale.
What is the present value of $500.00 to be paid in two years if the interest rate is 5 percent?
A) $453.51 B) $500.00 C) $476.25 D) $550.00
If the intersection of the IS curve with the horizontal axis comes at a level of output below the natural level of output, lowering interest rate to zero will
A) bring economy back to natural output. B) not bring the economy back to natural output. C) will have inflationary effects on the economy. D) will cause saving rates to increase.
If the cost of labor increases, the isocost line will
A) stay the same. B) shift outward in parallel fashion. C) rotate inward around the point where only capital is employed in production. D) shift inward in parallel fashion.