Suppose the marginal product of labor is MPN = 200 - 0.5Nwhere N is aggregate employment. The aggregate quantity of labor supplied is 100 + 4w, where w is the real wage. The government imposes a minimum wage of 60. How much unemployment will this create among unskilled labor?
A. 0
B. 80
C. 100
D. 60
Answer: D
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According to traditional Keynesian analysis, fiscal policy operates by
A. directly affecting aggregate demand. B. indirectly affecting aggregate demand through its effect on the money supply. C. directly affecting aggregate supply. D. informing business people about its plans for the economy so they will know how to adjust their behavior.
___ contains the information or meaning the source hopes to convey
Fill in the blank(s) with the appropriate word(s).
Which of the following goods will have the most inelastic demand at any time?
A. Jewelry B. Big Macs C. Electricity D. Pork chops
Which of the following changes shifts the AD curve down and to the left?
A) A temporary increase in government purchases B) A rise in the nominal money supply C) A decrease in corporate taxes D) A decrease in consumer confidence