The above figure illustrates the labor market for fast food restaurants in a small city in Peru. What would be the effects of a minimum wage imposed at $5.50 per hour?
A) unemployment equal to 400 hours
B) unemployment equal to 200 hours
C) a shortage of 400 hours
D) nothing because the minimum wage has no effect on the equilibrium price and quantity
A
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Which of the following makes it difficult to regulate a monopolistically competitive market?
A. It is difficult to assess the costs. B. It may stifle innovation if firms can’t make economic profit. C. There are many firms with different costs of similar products. D. All of the above are true.
In the aggregate expenditures model, if an economy operates below equilibrium GDP, there will be unplanned inventory accumulation
a. True b. False Indicate whether the statement is true or false
Which of the following is a major measure of economic growth?
A. The rise in the price level. B. Changes in interest rates. C. The fall in the rate of unemployment. D. Changes in real GDP per capita.
The expenditure multiplier in the ISLM framework is smaller than that derived from the simple Keynesian model because
A) velocity is always assumed to be constant. B) the economy is assumed to be in the liquidity trap. C) the aggregate supply curve is assumed to be horizontal. D) the LM curve is assumed to have a positive slope.