Suppose there is a labor shortage. Wages will ____ and the SRAS curve will shift ____
a. rise; left
b. fall; left
c. fall; right
d. rise; right
Ans: a. rise; left
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In an economic downturn, sticky wages and prices reduce the economy's speed of adjustment because
A) hyperinflation will likely occur. B) businesses are unable to adjust quickly to changes in aggregate demand. C) they cause deflation. D) union workers would likely quit and look for work elsewhere.
Other things constant, if a person prefers to have a good sooner rather than later
A) she is acting like a child. B) she has a negative rate of time preference. C) she has a zero rate of time preference. D) she has a positive rate of time preference.
Why might spending on basic literacy for girls have a social return that exceeds the private return?
What will be an ideal response?
The supply curve for loanable funds would increase due to a(n)
A) increase in wealth. B) increase in expected inflation. C) decrease in the liquidity of bonds relative to other assets. D) increase in the information costs of bonds relative to other assets.