If an effective minimum wage is set,
a. a labor surplus is created.
b. a labor shortage results.
c. wages fall below the market wage.
d. the level of employment rises.
a. a labor surplus is created.
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When the expenditure schedule is too high, the result is a(n)
A. unemployment surplus. B. inflationary gap. C. recessionary gap. D. budgetary gap.
A ________ in the real interest rate ________ consumption expenditure and shifts the consumption function ________
A) fall; increases; downward B) rise; decreases; upward C) fall; increases; upward D) fall, decreases; upward E) rise, increases; downward
Which of the following interest rates tends to fluctuate the most?
A) interest rate on corporate bonds B) interest rate on 10-year Treasury bonds C) mortgage interest rate D) federal funds rate
The economy's self-correcting mechanism
a. prevents the economy from ever being in disequilibrium b. guides the economy to full employment in the long run c. maintains a steady long-run price level d. is a short-run adjustment process e. is controlled by the Fed