An increase in the money wage rate will cause the aggregate supply curve to shift
a. outward, which means the quantity supplied at any price level decreases.
b. outward, which means the quantity supplied at any price level increases.
c. inward, which means the quantity supplied at any price level increases.
d. inward, which means the quantity supplied at any price level decreases.
d
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The oversimplified multiplier formula assumes that the
a. level of consumption spending is fixed. b. price level is fixed. c. government spending is fixed. d. net exports depend on income.
When monopolistically competitive firms advertise, in the long run
a. they will still earn zero economic profit. b. they can earn positive economic profit by increasing market share. c. the market price must fall. d. the market price must rise.
Bob is not considered unemployed if he
A. is temporarily laid off. B. is not working but has looked for a job for the past two months. C. is not looking for a job. D. all of the above.
Refer to the diagram for the federal funds market. If the quantity of reserves rises from $100 billion to $150 billion, we can expect:
A. the federal funds rate to fall to 3.5 percent.
B. the discount rate to fall.
C. the prime interest rate to fall below 4.0 percent.
D. banks to become more cautious in lending.