Which of the following will lead to a decrease in the firm's short-run demand for labor?
A) an increase in the price of the final product
B) an increase in price of the final product's substitute good
C) a decline in labor productivity
D) an increase in the number of buyers for the final product
C
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To fight inflation, the government may
A. decrease aggregate demand, which will also lead to lower unemployment rates. B. increase aggregate demand, which will also lead to lower unemployment rates. C. increase aggregate demand, which will also lead to higher unemployment rates. D. decrease aggregate demand, which will also lead to higher unemployment rates.
With flexible exchange rates, central banks do not have to finance deficits because BOP equilibrium is restored by changes in exchange rates
Indicate whether the statement is true or false
The life-cycle theory of consumption predicts that when a person anticipates a higher income in the future, then that person will
A) consume more and save less in the current period. B) consume less and save more in the current period. C) consume less and save less in the current period. D) not change the amount of consumption or saving in the current period.
Suppose the government of South Island has fixed the value of its currency, the Islandia, at $0.50 per Islandia, but the market equilibrium value of the Islandia is $0.25 per Islandia. In order to maintain the official value of the Islandia the Central Bank of South Island must either ________ domestic interest rates or purchase Islandia, which causes the supply of international reserves to ________.
A. lower; decrease B. lower; increase C. raise; increase D. raise; decrease