Refer to Exhibit 9-2. The economy is currently producing Q1. At this level of Real GDP, the economy is experiencing
a. a shortage in the labor market.
b. a surplus in the labor market.
c. neither a shortage nor a surplus in the labor market.
d. all of the above are equally likely
Ans: a. a shortage in the labor market.
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In which of the following markets do firms sell the same standardized product?
A. Four-door cars B. Desktop computers C. 2% milk D. Sandwiches
Cost minimization requires that a firm equate the ratio of marginal products of inputs to the ratio of input prices.
Answer the following statement true (T) or false (F)
The Fed usually prefers the inflation rate to hover around ________
A) 6% B) 10% C) 2% D) 5%
If inventories decline by more than analysts predict they will decline, this implies that
A) actual investment spending was equal to than planned investment spending. B) there is no relationship between actual investment spending and planned investment spending. C) actual investment spending was greater than planned investment spending. D) actual investment spending was less than planned investment spending.