The economy enters the long-run once:
A. Nominal wages become equal to real wages
B. Real wages become equal to nominal wages
C. Sufficient time has elapsed for wage contracts to expire and nominal wages to adjust to output-price changes
D. Sufficient time has elapsed for real GDP to increase and unemployment to decrease as a consequence
C. Sufficient time has elapsed for wage contracts to expire and nominal wages to adjust to output-price changes
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Collusion is a key type of cooperation for
A. maximizing revenue. B. monopolistic competition. C. becoming a monopoly. D. cartels.
When the unemployment rate is ________ the natural unemployment rate, real GDP is ________
A) above; increasing B) above; above potential GDP C) below; above potential GDP D) below; increasing E) equal to; either equal to potential GDP or above potential GDP
Which of the following events at an automobile manufacturing plant would most likely cause the movement from S 1 to S 2 ?
a. Hundreds of additional workers were hired to staff a new shift.
b. Millions of dollars were invested to expand and outfit the new facility.
c. Amenities in the plant included onsite child care, a gym, and a health clinic.
d. Many workers were laid off when some plant operations were automated.
Under the rational expectations hypothesis, which of the following is the most likely short-run effect of a move to expansionary monetary policy?
A. a higher general level of prices but no change in real output B. a higher general level of prices and an expansion in real output C. no change in the general level of prices and a reduction in real output D. no change in either the general level of prices or real output