According to the real business cycle theory, which of the following is a TRUE statement about the effects of an oil shock in the 1970s?
A. Relative prices changed but there was no impact on the price level in general.
B. The natural rate of unemployment remained unchanged, but employment levels did decline.
C. The shock affected real variables only and did not affect nominal variables.
D. The shock shifted the short-run aggregate supply curve but not the long-run aggregate supply curve.
Answer: B
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A. federal funds rate B. prime rate C. commercial paper rate D. Federal Reserve discount rate
Which of the following is likely to shift the demand curve for engineers rightward, assuming all else equal?
A) An increase in the wage rate paid to engineers B) A decrease in the wage rate paid to engineers C) An increase in the productivity of engineers D) A decrease in the price of all products manufactured by engineers
How is a firm's labor demand curve affected when the price of its product rises?
What will be an ideal response?
The balance of payments ____
a. b and e b. is always zero c. is positive when the nation runs a trade surplus d. is negative when the nation runs a trade deficit e. is an itemized account of a nation's foreign economic transactions