Which of the following correctly identifies the difference between the demand for labor and the demand for final goods?
A) The demand for labor is fixed over time, whereas the demand for final goods changes according to changes in tastes and preferences.
B) The demand for final goods is fixed over time, whereas the demand for labor changes according to the changes in tastes and preferences.
C) The demand for final goods is derived from the demand for labor, whereas the demand for labor is independent of the demand for final goods.
D) The demand for labor is derived from the demand for final goods, whereas the demand for final goods is independent of the demand for labor.
D
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A system where goods and services are exchanged directly without a common unit of account is called the:
A) commodity system. B) fiat system. C) barter system. D) none of the above.
If policy makers think the natural rate of unemployment is lower than it really is, then their policies designed to move the economy to the estimated natural rate, if continued over the long run, will: a. cause continuing inflation
b. shift the long-run aggregate supply curve to the right. c. shift the supply curve of labor to the right. d. lead to a lower price level. e. keep the economy below its potential GDP level.
Avital and Joshua each have their own business selling lemonade in front of their houses. When they each charge 25 cents per glass, their total revenues are equal. However, when they each charge 40 cents per glass, Avital's revenues are bigger than Joshua's revenues. This is because
a. Joshua faces a more inelastic demand curve b. Avital faces a more elastic demand curve c. Joshua faces a more elastic demand curve d. Avital faces a less inelastic demand curve e. there is a market failure
The economy is initially in long-run equilibrium. The AD curve shifts to the right and the price level rises. Assuming that the economy is self-regulating, the SRAS curve will shift to the left and the price level will rise even further. If the price level now remains constant, what have we witnessed?
A) one-shot demand-induced inflation B) continued demand-induced inflation C) one-shot supply-induced inflation D) one-shot inflation that was partly demand-induced and partly supply-induced E) continued supply-side inflation