Why does an increase in the minimum wage increase the demand for union labor?
What will be an ideal response?
An increase in the minimum wage raises the cost of unskilled labor, which is typically nonunionized. By making this type of labor, which can be substituted for union labor, more expensive, an increase in the minimum wage increases the demand for union labor.
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If consumption is $6 billion, investment is $3 billion, government purchases are $1 billion, and GDP is $12 billion, then net exports must equal:
A. $22 billion. B. $10 billion. C. $2 billion. D. $12 billion.
Other things the same, an increase in the price level induces less spending on a. investment and net exports
b. investment, but not net exports. c. net exports, but not investment. d. neither net exports nor investment.
The figure below shows the supply and demand curves for jeans in Smallville.
The equilibrium price will NOT lead to the largest possible total economic surplus if:
A. the market for jeans is perfectly competitive. B. the production of jeans generates air pollution. C. there are diminishing returns in the production of jeans. D. jeans are purchased by consumers with reservation prices greater than $40.
When the Fed eases U.S. monetary policy, domestic interest rates ________, making U.S. assets relatively less attractive to foreign investors, and ________ the equilibrium exchange rate.
A. rise; decreasing B. rise; increasing C. fall; decreasing D. fall; increasing