An economy experiencing an expansionary gap:
a. operates in an environment in which labor shortages drive up money wages, real wages, and prices.
b. has an excess supply of labor due to rising money wages and prices
c. will self-correct as rising money wages decrease faster than rising prices.
d. will experience rising money wages and prices but falling real wages.
e. will have excessive involuntary unemployment.
a
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Suppose the numbers in parentheses represent two points on a line: (59 billion quarts; $4) and (78 billion quarts; $6). The line is most likely a
a. production possibilities frontier for milk. b. supply curve for milk. c. demand curve for milk. d. ray through the origin. e. time series line.
To anticipate what the economy is going to do next the government will look at:
a) Lagging indicators b) Flashing indicators c) Coincidental indicators d) Leading indicators
If price is between the shutdown and break-even points, in the short run the firm will _____ and in the long run the firm will _____.
A. operate; go out of business B. operate; stay in business C. shut down; go out of business D. shut down; stay in business
A given level of consumer demand will support a large number of producers in an industry if:
A. Minimum efficient scale (MES) is very large B. The long-run ATC curve decreases as output levels increase C. Diseconomies of scale are already encountered even at low levels of output D. Exclusive patents and high government license fees are prevalent in the industry