Explain how labor resistance and political and legislative influences reduce the ability of firms to minimize their costs of production. What do the two have in common in this regard?
What will be an ideal response?
Both labor resistance and political and legislative influences constrain the set of choices firm managers have when it comes to the production process. Labor resistance is often focused on protecting existing jobs. Thus, it becomes more difficult for the manager to substitute capital for labor or combine two or more tasks in an effort to reduce production costs. Legislative influences often come in the form of mandated combinations of capital and labor or restrictions on the minimum number of workers that can be assigned to a particular task. Once again, this has the effect of limiting the manager's choices and may preclude certain input combinations that would result in reduced production costs.
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Use the following list of factors that are related to the aggregate demand curve to answer the next question.1) Real-Balances Effect2) Household Expectations3) Interest-Rate Effect4) Personal Income Tax Rates5) Profit Expectations6) National Income Abroad7) Government Spending8) Foreign Purchases Effect9) Exchange Rates10) Degree of Excess CapacityWhich of the above factors best explain the downward slope of aggregate demand curve?
A. 7, 9, and 10 B. 4, 6, and 7 C. 2, 4, and 6 D. 1, 3, and 8
A standard definition of recession is
A) a period of expansion in many sectors of the economy. B) an increase in GDP that lasts for at least 6 months. C) a decrease in GDP that lasts for at least 6 months. D) an increase in unemployment from one month to the next. E) a period of time when the unemployment rate exceeds 6.5 percent.
Everything else held constant, if the sum of the required reserve ratio and the excess reserve ratio is less than one, an increase in the currency-deposit ratio causes the M1 money multiplier to ________ and the money supply to ________
A) decrease; increase B) increase; decrease C) decrease; decrease D) increase; increase
The classical economists argued that the production of goods and services (supply) generates an equal amount of total income and, in turn, total spending. This theory is called:
a. Keynes' General Theory. b. Say's Law. c. the "animal spirits" theory. d. the law of autonomous consumption.