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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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
When the expenditure schedule is too high, the result is a(n)
A. unemployment surplus. B. inflationary gap. C. recessionary gap. D. budgetary gap.