When unions raise wages beyond what productivity increases would permit,
A) more union workers are employed.
B) there are higher wages for all union members.
C) there is a redistribution of income from low- to high-seniority workers.
D) nonunion workers wages in the economy also increase.
Answer: C
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John is trying to decide how to divide his time between his job as a stocker in the local grocery store, which pays $7 per hour for as many hours as he chooses to work, and cleaning windows for the businesses downtown. He makes $2 for every window he cleans. John is indifferent between the two tasks, and the number of windows he can clean depends on how many hours he spends cleaning in a day, as shown in the table below:Hours PerDay CleaningWindowsTotal Numberof WindowsCleaned0017211314416517The first hour John spends cleaning windows costs him ________ that he could have earned in the grocery store.
A. $18 B. $14 C. $2 D. $7
Starting from long-run equilibrium, a large tax increase will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. recessionary; lower; potential B. expansionary; lower; potential C. expansionary; higher; potential D. recessionary; lower; lower
Suppose that a firm can invest $100 today in a project and receive $105 a year from today. There is no inflation, and the annual interest rate in the economy is 4%. The firm should
A) invest in the project because the opportunity cost is the same as the return on the investment. B) invest in the project because the opportunity cost is greater than the return on the investment. C) invest in the project because the opportunity cost is less than the return on the investment. D) not invest in the project because the opportunity cost is less than the return on the investment.
What is economic freedom and why is it important for economic growth?
What will be an ideal response?