A war destroys much of the capital stock in the country of Omega. As a result, holding other factors constant, the real wage in Omega will ________ and employment in Omega will ________.
A. increase; decrease
B. decrease; decrease
C. increase; not change
D. increase; increase
Answer: B
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Total income
A) excludes profits. B) includes only wages and interest payments. C) is the yearly amount earned by owners of the nation's resources. D) includes only wages received by workers.
The short-run Phillips curve shows
A) a tradeoff between the unemployment rate and the inflation rate. B) a tradeoff between real GDP and unemployment. C) the expected inflation rate. D) the natural unemployment rate. E) potential GDP.
Susie knows that too many sugary treats, while delicious when eaten, have long-term adverse effects on weight and health. Based on this information, a neoclassic economist would expect Susie to:
A. carefully weigh the short-term benefits against the long-term costs and make a rational decision about how many treats to eat. B. eat more sugary treats than is optimal, as she likely gives more weight to present events and outcomes than to ones in the future. C. give away most of her sugary treats in an effort to resist temptation. D. determine her fair share of the sugary treats available, and only eat those.
Is demand for electricity more price elastic when measured over a short period of time or a long period of time? Explain.
What will be an ideal response?