Suppose the full-employment equilibrium real wage rate is $11 per hour while the actual real wage rate is $12 per hour. If the actual real wage rate does not change, then
A) job rationing will decrease.
B) the production function will shift downward.
C) job search will decline.
D) job rationing will occur.
E) a positive Okun Gap will occur.
D
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The contract curve in an Edgeworth Box diagram illustrates
A) the only efficient allocation of goods among individuals. B) all possible efficient allocations of goods among individuals. C) all equitable distributions of goods among individuals. D) the only equitable distribution of goods among individuals.
Export promotion has been more successful than import substitution
a. True b. False
Using Figure 2 below, suppose that the economy started at PAE2. A potential change that could cause the economy to go from PAE2 to PAE1 might be:
A. wealth level decreases.
B. interest rates decrease.
C. expected profitability of investments increase.
D. domestic income decreases.
Indirect stock ownership means that a person
a. buys stocks through a stockbroker b. puts money into financial intermediaries that buy stocks c. has a friend buy stocks so that the IRS won't know about it d. puts money into a partnership rather than a corporation e. buys bonds instead of stocks when the interest rate is high