An adverse oil-price shock reduces labor demand. What happens to current employment and the real wage rate?
A) Both employment and the real wage rate would increase.
B) Both employment and the real wage rate would decrease.
C) Employment would increase and the real wage would decrease.
D) Employment would decrease and the real wage would increase.
B
You might also like to view...
Those who accept both the rational expectations hypothesis and the assumption of flexibility of wages and price would likely argue that
A) if policy makers are willing to accept a high inflation rate, they can reduce unemployment to a point below the natural rate. B) policy makers can eliminate fluctuations in the level of business activity with careful planning of a widely publicized monetary policy. C) saving and investment do not contribute to economic growth. D) active policy making does not contribute to economic stability.
A rise in the price of cabbage from $14 to $18 per bushel increases the quantity supplied from 4,000 to 6,000 bushels. The elasticity of supply is
A) 0.6. B) 0.8. C) 1.0. D) 1.6.
Which of the following is true?
a. International trade makes it possible for a country's consumption possibilities to exceed its production possibilities. b. International trade requires that a country's production possibilities exceed its consumption possibilities. c. A country's production possibilities always equal its consumption possibilities. d. A country's consumption possibilities can never equal its production possibilities because of leakages in the system. e. As long as there is full employment of resources, a country's production possibilities will exceed its consumption possibilities even with trade.
With a negative income tax providing a minimum of $20,000 and a tax rate of 25 percent, what amount of supplement would the government pay to a household earning $10,000?
a. $5,000 b. $10,000 c. $17,500 d. $20,000