(Consider This) Some economists believe that modest inflation, say 2-3 percent, might help reduce unemployment during recessions. What is the argument of economists who reject this idea?
A. Consumers would stop buying goods at higher prices, reducing demand, output, and
employment.
B. Firms will pocket the profits resulting from higher prices and have no incentive to expand
output and employment.
C. Wages and other costs would rise with the inflation, keeping firms from expanding
employment.
D. Consumer spending would shift to cheaper imported goods, reducing domestic demand
and employment.
C. Wages and other costs would rise with the inflation, keeping firms from expanding
employment
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A supply curve is also a maximum-supply-price curve
Indicate whether the statement is true or false
When a union raises the wage above the equilibrium level,
a. both the quantity of labor supplied and unemployment rise. b. both the quantity of labor supplied and unemployment fall. c. the quantity of labor supplied rises and unemployment falls. d. the quantity of labor supplied falls and unemployment rises.
Refer to the below table. What would the wage rates be if the 12 million female workers could work in labor market C only because of labor market discrimination, while half the 12 million male workers are employed in labor market A and the other half in labor market B?
Suppose there are only three labor markets (A, B, and C) in the economy and each of these markets is purely competitive. The table below contains the demand (or marginal-revenue-product) schedule for labor in each of these three markets. Assume there are 24 million homogeneous workers in the economy and that one-half of these workers are male and one-half are female
A. $7.00 for females and $7.00 for males
B. $7.00 for females and $13.00 for males
C. $8.00 for females and $13.00 for males
D. $8.00 for females and $11.00 for males
The more sensitive planned investment is to the interest rate, the less effective fiscal policy.
a. true b. false