Refer to the graphs below. Graph A is constructed on the basic assumption that:
In the graphs below, QP refers to the economy's potential output level.
A. The price level is not flexible
B. Nominal wages are unresponsive to price-level changes
C. Real output is unresponsive to price-level changes
D. Unemployment is unresponsive to price-level changes
B. Nominal wages are unresponsive to price-level changes
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Decreases in taxes shift the aggregate demand curve to the right
Indicate whether the statement is true or false
Perfect capital mobility mixed with floating exchange rates means that
A) fiscal spending is completely ineffective. B) monetary policy is completely ineffective C) neither fiscal nor monetary policy will be effective. D) both fiscal and monetary policies efficiencies will be maximized.
The equilibrium wage
a. is the same in all labor markets b. occurs where the supply of labor curve begins to bend backward c. cannot be calculated because there are so many labor markets d. is determined by the market demand for labor and the market supply of labor e. is irrelevant because of unions
Which of the following best describes a flow rather than a stock? a. You own $5,000 worth of government bonds. b. You own a $100,000 house
c. You own a coin collection valued at $10,000. d. You earn $500 per week. e. You own a $45,000 automobile.