Over the long run, migration by workers to higher-wage regions:
a. allows wages to equalize across regions.
b. explains why wage differentials may persist.
c. causes disequilibrium in the labor market.
d. increases wages further in those regions.
A
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Consumption has fallen substantially in Techland due to pessimism among households. What will be the outcome if a contractionary monetary policy is adopted during this period?
What will be an ideal response?
Refer to Figure 6-6. As price falls from PA to PB, the quantity demanded increases most along D1; therefore
A) D1 is more elastic than D2 or D3 B) D1 is more inelastic than D2 or D3. C) D1 is elastic at PA but inelastic at PB. D) D1 is unit elastic.
One method of assessing the degree to which current fiscal policies affect future generations is through a device called
A) inter-temporal fiscal accounting. B) generational accounting. C) long-term debt assessment technique. D) fiscal stabilization tool.
The law of demand is based on the observation that
A. people always want more than they need. B. people are indifferent to price changes. C. people buy more of a product when its price falls. D. people buy less of a product when the product becomes less fashionable.