We would expect unions to have a more difficult time negotiating higher wages for their members when
A) labor represents a small portion of total costs.
B) the product produced makes up a small portion of families' budgets.
C) the product produced has several close substitutes.
D) there are not good substitutes for labor in the production process.
Answer: C
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Bank reserves include
A) vault cash and deposits with the Federal Reserve. B) loans to bank customers and deposits with the Federal Reserve. C) vault cash and loans to bank customers. D) customer checking accounts and vault cash.
Discretionary policy advocates believe: a. that there is a high cost associated with the use of a discretionary policy
b. that self-corrective forces in an economy work slowly. c. that natural adjustments of wages and prices can help attain potential output. d. in rational expectations. e. that an active stabilization policy imposes troubling fluctuations in the price level and real GDP.
When the aggregate demand curve shifts to the right, intersecting the aggregate supply curve on its upward-sloping or vertical segment,
a. demand-pull inflation occurs. b. cost-push inflation occurs. c. stagflation occurs. d. deflation occurs. e. the shift pulls the price level down.
If a specific segment of a demand curve is price elastic, then we know that anywhere along that segment, the
a. percentage change in the quantity demanded exceeds one b. percentage change in quantity demanded exceeds the percentage change in price c. percentage change in price exceeds the percentage change in quantity demanded d. the change in quantity demanded exceeds the change in price e. the good has no close substitutes