When the economy is not on the FE line and the price level is fixed, the ________ gives the level of employment.
A. effective labor demand curve
B. LM curve
C. IS curve
D. production function
Answer: A
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Jack just received a promotion at work and now works 50 hours per week instead of 35. As a result,
A) the unemployment rate increased. B) the labor force participation rate increased. C) the unemployment rate decreased. D) neither the unemployment rate nor the labor force participation rate changed.
Any event that increases the value of the marginal product of labor will:
A. increase labor demand. B. decrease labor demand. C. increase labor supply. D. decrease labor supply.
American and Japanese workers can each produce 4 cars a year. An American worker can produce 10 tons of grain a year, whereas a Japanese worker can produce 5 tons of grain a year. To keep things simple, assume that each country has 100 million workers. Which country has an absolute advantage in producing cars? In producing grain?
a. U.S in cars; Japan in grain b. Japan in cars; U.S in grain c. U.S in cars; U.S in grain d. Neither in cars; U.S in grain
The crowding out of consumer spending by an increase in taxes will be the greatest when
A) consumers would have spent the entire amount they now must pay in taxes. B) consumers would have saved the entire amount they now must pay in taxes. C) consumers would have spent only a fraction of the amount they now must pay in taxes. D) the government has a history of increasing taxes on a regular basis.