If the supply of labor increases, which of the following events will occur?
A. The wage rate will fall and firms will increase employment up until the point where MRP equals the new wage rate.
B. The wage rate will increase and firms will decrease employment to the point where MRP equals the new wage rate.
C. The wage rate will fall and firms will decrease employment to the point where MRP equals the new wage rate.
D. The wage rate will increase and firms will increase employment up until the point where MRP equals the new wage rate.
Answer: A
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Under a system of fixed exchange rates, what happens if a country's currency is overvalued?
A) The central bank loses official reserve assets. B) The central bank gains official reserve assets. C) The currency appreciates. D) The exchange rate rises.
Compared to earlier times, the period of the 1950s to the early 1960s was one characterized by
(a) temporary deficit spending of the government. (b) permanent deficit spending of the government. (c) temporary surplus spending of the government. (d) permanent surplus spending of the government.
Remembering that demand elasticity is defined as the percentage change in quantity divided by the percentage change in price, if price decreases and, in percentage terms, quantity rises more than price has dropped, total revenue will
A) increase. B) decrease. C) remain the same. D) either increase or decrease.
Generalizing using statistical discrimination is:
A. a rational response to being on the wrong end of an information asymmetry. B. a rational response, although government always steps in to prevent it. C. an irrational response and always leads to loss of surplus. D. All of these statements are true.