Sticky wages:
A. slow economic recoveries but decrease the costs that unemployed workers bear.
B. speed economic recoveries but increase the costs that unemployed workers bear.
C. slow economic recoveries and increase the costs that unemployed workers bear.
D. speed economic recoveries and decrease the costs that unemployed workers bear.
Ans: C. slow economic recoveries and increase the costs that unemployed workers bear.
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When income taxes fall, the supply of labor curve shifts rightward, ultimately leading to the LRAS curve shifting rightward (economic growth)
Indicate whether the statement is true or false
Consider an economy with a labor force of 200 million people of which 180 million are employed while 20 million are unemployed. Each period, 45% of the unemployed population finds a job. If the economy is in a steady-state of unemployment, what percent of the employed population lose their job each period?
A. 15% B. 5% C. 25% D. 20% E. 10%
How does innovation differ from invention and diffusion? How does innovation affect competition among firms?
What will be an ideal response?
Assume the market for ball bearings is purely competitive. Currently, each of the firms in this market is earning negative economic profits. In the long run, we can expect the market:
A. Supply to increase and firms' profits to decrease B. Demand to increase and firms' profits to increase C. Supply to decrease and firms' profits to increase D. Demand to decrease and firms' profits to decrease