If the percentage increase in nominal wage rates is less than the percentage increase in the price level, then:
a. real wage rate rises and the unemployment rate falls.
b. both real wage rate and the unemployment rate rises.
c. both real wage rate and the unemployment rate falls.
d. real wage rate rises and the unemployment rate remains unchanged.
e. both real wage rate and the unemployment rate remains unchanged.
c
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Like tariffs, quotas tend to lead to
A) higher prices and reduced imports. B) increased government revenue. C) increased consumer surplus. D) All of the above.
According to the Keynesian analysis, the point of equilibrium income
a. must recede as output increases. b. must be a point at less-than-full employment. c. must correspond to the full-employment level. d. can be anywhere along the 45-degree line.
The Arrow impossibility theorem shows that
a. democracy should be abandoned as a form of government. b. it is impossible to improve upon democratic voting methods as a mechanism for social choice. c. all voting systems are flawed as a mechanism for social choice. d. the median voter's preferences will always win in a two-way vote.
Answer the following statements true (T) or false (F)
1) In an uncontrolled or unregulated system, commercial bank lending will tend to intensify the business cycle. 2) An individual bank can safely lend out a multiple of its excess reserves, but the banking system can safely lend out only an amount equal to the excess reserves in the banking system. 3) If the reserve requirement is 20 percent, the monetary multiplier will be 4. 4) The higher the reserve requirement, the lower is the monetary multiplier.