The wage rate rises. As a result, in the short run Real GDP will __________ and the price level will __________
A) rise; rise
B) fall; fall
C) remain constant; fall
D) fall; rise
E) rise; fall
D
You might also like to view...
A consumer has $1,000 a week to spend on renting square feet of housing x1 (at a price of $5 per square foot) and eating out meals x2 (at a price of $20 per meal). Derive the budget line equation and find the opportunity cost of housing in terms of meals in your equation.
What will be an ideal response?
The principal distinction between positive analysis and normative analysis is that
A) positive analysis is useful and normative analysis is not useful. B) positive analysis is optimistic and normative analysis is neutral. C) economists always agree on the conclusions of positive analysis but could disagree on the conclusions of normative analysis. D) positive analysis tells us "what is," but normative analysis tells us "what ought to be."
On a coupon bond, the yield to maturity
A) always equals the coupon rate. B) equates the present value of all the bond's payments to its price today. C) increases when the market price of the bond increases. D) equals the coupon payment divided by the current price of the bond.
According to the Keynesian view, an unanticipated reduction in spending will
a. increase the demand for goods and services. b. raise business inventories and lead to a decline in output. c. lead to lower interest rates, which will stimulate aggregate demand and keep the economy at full employment. d. lead to a lower price level, which will quickly guide the economy to full-employment equilibrium.