Following a decline in the inflation rate, once long-term wage contracts are renegotiated and all prices in the economy adjust to their new equilibrium:
a. the economy will move up the short-run Phillips curve.
b. the short-run Phillips curve will shift to the left.
c. the economy will return to the vertical Phillips curve.
d. the aggregate supply curve will shift to the right.
e. the aggregate demand curve will shift to the right.
c
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Beef is a normal good and people's incomes fall. At the same time a bumper corn crop reduces the cost of feeding steers. These changes result in
A) an increase in the equilibrium quantity of beef. B) an increase in the equilibrium quantity of beef if the shift in the demand curve is smaller than the shift in the supply curve. C) an increase in the equilibrium quantity of beef if the shift in the demand curve is larger than the shift in the supply curve. D) no change in the equilibrium quantity of beef.
The above figure shows the supply and demand curves for high-skilled and low-skilled labor. Low-skilled workers earn a wage rate of
A) $15 per hour. B) $12 per hour. C) $9 per hour. D) $6 per hour.
The short-run aggregate supply curve shows a(n):
a. direct relationship between the expected price level and nominal GDP supplied. b. inverse relationship between the actual price level and real GDP supplied c. direct relationship between the actual price level and nominal GDP supplied. d. direct relationship between the actual price level and real GDP supplied. e. inverse relationship between the expected price level and real GDP supplied.
If the marginal tax rate is too high, it can cause all of the following except
A. Government tax receipts to decline. B. Work effort to decrease. C. Businesses to produce more. D. The rate of saving to decline.