Using Figure 1 above, if the aggregate demand curve shifts from AD2 to AD3 the result in the short run would be:
A. P1 and Y2.
B. P2 and Y3.
C. P3 and Y1.
D. P2 and Y2.
Answer: B
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Minimum wage laws:
A) can cause the quantity demanded to exceed the quantity supplied of labor. B) are used to solve the problem of wage rigidity. C) can give rise to wage rigidity. D) help in equating the quantity of labor demanded and supplied.
Who of the following is counted as "unemployed" by the Bureau of Labor Statistics?
a. someone working without pay for a family member's business b. someone who is absent from their job due to illness c. someone on temporary layoff d. All of the above are correct.
Changes in aggregate spending not caused by changes in output or the inflation rate, also known as exogenous changes in spending, will shift the:
A. potential output line. B. aggregate demand curve. C. short-run aggregate supply curve. D. long-run aggregate supply curve.
In the graph above, A is the initial budget line and B is the new budget line. Which of the following changes might have occurred?
A. P1 decreased, P2 was unchanged, income increased. B. P1 increased, P2 decreased, income was unchanged. C. P1 decreased, P2 increased, income was unchanged. D. P1 was unchanged, P2 increased, income decreased.