A fall in the price level brings a ________ in the real wage rate that ________ profits which leads to ________
A) fall; increases; firms temporarily shutting down
B) rise; reduces; firms restarting production
C) rise; increases; firms temporarily shutting down
D) rise; reduces; firms temporarily shutting down
E) rise; increases; firms restarting production
D
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To help unscramble cause and effect, economists
A) use the concept of opportunity costs. B) must use the ceteris paribus assumption. C) answer the "what" question. D) answer the "how" question. E) must use normative statements.
A money supply increase in the New Keynesian model is not neutral because
A) consumers are fooled into working harder. B) the real interest falls, the quantity of output demanded rises, and firms supply more output. C) productivity rises, increasing output supply. D) bank lending rises.
Which of the following is not a feature of the steady state in Solow's exogenous growth model?
A) The capital/output ratio is steady. B) Capital grows continuously. C) Consumption per worker is steady. D) Total saving is steady.
A good that entails relatively high fixed costs associated with the use of knowledge and other information-intensive inputs as key factors of production is
A) a logo good. B) a search good. C) a persuasive good. D) an information product.