Each of the following statements describes how the political and legal environment encourages productivity except:
A. Political stability promotes economic growth.
B. Well-defined property rights encourage production and saving.
C. Price changes in markets give suppliers incentives to supply goods to markets.
D. Pay rates determined by a governmental planning agency provide workers with stronger incentives to work hard than market wages.
Answer: D
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When the minimum wage is raised, the ________ union labor ________
A) demand for; increases B) demand for; decreases C) supply of; increases D) supply of; decreases E) demand for; does not change
Which of the following statements are correct? In (the)
a. Keynesian model, unemployment is voluntary. b. real business cycle models, all unemployment is voluntary. c. new classical models, there is voluntary unemployment. d. Both b and c e. All of the above
Based on the diagram, if potential output equals 8,000 and the real interest rate is 6 percent, then there is ________ gap and the Fed must ________ the real interest rate so that output will equal potential output.
A. a recessionary; raise B. an expansionary; raise C. a recessionary; reduce D. no output; not change
In the short run:
A. all factors of production are fixed. B. all factors of production are variable. C. some factors of production are variable, while at least one factor of production is fixed. D. None of these are correct.