If the market wage for fast-food restaurants is $4 and the government enforces a minimum wage of $7, the unemployment rate will
A. Increase as quantity of labor supplied increases and quantity of labor demanded decreases.
B. Not be affected by the minimum wage.
C. Increase as quantity of labor supplied increases and quantity of labor demanded increases.
D. Increase as quantity of labor supplied decreases and quantity of labor demanded increases.
Answer: A
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A bank's actual reserves can be calculated by: a. multiplying its demand deposits by the required reserve ratio. b. multiplying its excess reserves by the required reserve ratio. c. subtracting its required reserves from its excess reserves
d. adding its required reserves and its excess reserves.
Contractual provisions based on indexing are also called
a. withdrawal clauses. b. swap clauses. c. escalator clauses. d. averaging clauses.
Since the end of World War II, the U.S. has almost always had rising prices and an upward trend in real GDP. To explain this
a. it is only necessary that long-run aggregate supply shifts right over time. b. it is only necessary that aggregate demand shifts right over time. c. both aggregate demand and long-run aggregate supply must be shifting right and aggregate demand must shift farther. d. None of the above cases would produce rising prices and growing real GDP over time.
The difference between nominal and real interest rates is that
A. real interest rates are what you get after having adjusted nominal rates for inflation. B. nominal interest rates are what borrowers pay and real interest rates are what lenders receive. C. real interest rates are almost always greater than nominal interest rates. D. nominal interest rates are what lenders receive and real interest rates are what borrowers pay.