Which of the following labor market trends have occurred in both the U.S. and in most Western European countries?
A. a substantial growth in real wages over the twentieth centaury
B. a substantial growth in real wages and double digit rates of unemployment in the 1990s
C. continuous and substantial growth in real wages and substantial job growth
D. a pronounced decrease in wage inequality and double digit rates of unemployment in the 1990s
Answer: A
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The original intent of the Federal Reserve Act of 1913 was to provide the Fed with what role?
A) regulator of the banking system B) lender of last resort C) manage the exchange rate D) maintain a balanced budget
Suppose the economy is in equilibrium when business firms decide to increase investment spending by $100 billion. According to the short-run macro model, what would be the effect on equilibrium real GDP?
a. There would be no effect; the increased investment spending would be offset by decreased spending in other sectors. b. It would increase by $100 billion. c. It would increase by more than $100 billion. d. It would increase, but by less than $100 billion. e. It would decline by $100 billion.
Imagine an economy where the only good produced is corn. Output in 1990 was 100 bushels and the price of corn was $2 per bushel. Suppose in 2000 . output is 100 bushels and the price of corn is $4 per bushel. Which one of the following is true?
a. GDP remains unchanged between 1990 and 2000. b. Real GDP doubled between 1990 and 2000. c. Output doubled between 1990 and 2000 . but GDP remains unchanged. d. Nominal GDP fell in 2000 (compared to 1990) because of higher corn prices. e. Nominal GDP increases from $200 in 1990 to $400 in 2000.
Repeat the exercise using total analysis (i.e., total social benefits (TSB) and total social costs (TSC)).
What will be an ideal response?