Answer the following questions true (T) or false (F)
1. Most economists believe that labor unions significantly increase the overall unemployment rate in the United States.
2. Efficiency wage is another name for the minimum wage.
3. The unemployment rate tends to be higher in the European Union as compared to the United States.
1. FALSE
2. FALSE
3. TRUE
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Refer to the table above. What happened to the real value of the minimum wage between 1974 and 2011?
A) It decreased. B) It remained the same. C) It increased. D) It could not be determined from the given information.
The line showing potential GDP is a vertical straight line because
A) it represents the minimum level of real GDP in a recession. B) when nothing else changes, a higher price level has no effect on real GDP. C) the aggregate supply curve is upward sloping. D) economists are unsure about how to determine potential GDP. E) there is only one level of full employment at any point in time.
If businesses expect the economic activity to expand
A) the planned investment function relating investment to the interest rate will shift to the left. B) the planned investment function relating investment to the interest rate will remain unchanged, but will move downward along the curve. C) the planned investment function relating investment to the interest rate will steepen. D) the planned investment function relating investment to the interest rate will shift to the right.
The economic model of demand
a. explains the consequences of a change in buyers' tastes, but not the causes b. explains the causes of a change in buyers' tastes, but not the consequences c. explains both the causes and consequences of a change in buyers' tastes d. explains neither the causes nor the consequences of a change in buyers' tastes e. ignores buyers' tastes because they are too unstable to include in the model