In the Keynesian model, the real wage is mildly procyclical because
A) demand for labor fluctuates with the demand for final goods.
B) firms take advantage of recessions to pay slightly lower wages, since there's excess labor supply.
C) workers' effort may depend on the unemployment rate and the real wage.
D) the supply of labor fluctuates with the business cycle.
C
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The interest rate that banks pay for borrowing overnight from other banks is called:
a. bank rate. b. target rate. c. federal funds rate. d. real interest rate. e. prime lending rate.
If the fluctuations in the economy's real growth rate from year to year are caused primarily by variations in the rate at which aggregate supply increases, then data would show
a. a cyclical relationship between inflation and unemployment. b. a direct relationship between inflation and unemployment. c. an inverse relationship between inflation and unemployment. d. no relationship between inflation and unemployment.
One reason that governments may find it useful to sponsor universities and basic research is that to a large extent knowledge is generally a private good
a. True b. False Indicate whether the statement is true or false
Suppose a single egg farmer alters the number of eggs she produces but the change in egg output does not have any effect on the market price. This example describes which of the following characteristics of perfect competition?
A. large number of small firms B. homogeneous product C. very easy entry and exit D. mutual interdependence