(Consider This) Some economists believe that modest inflation, say 2-3 percent, might help reduce unemployment during recessions. Which of the following best explains their argument?
A. Inflation will cause workers' real income to decline, encouraging them to work harder to
find more and better employment.
B. Higher prices will increase firm profitability, making them want to hire more workers.
C. Higher prices will correspond with higher wages, which will stimulate demand and
employment.
D. Anticipating this inflation, consumers will increase spending to beat the price increases,
increasing demand, output, and employment.
B. Higher prices will increase firm profitability, making them want to hire more workers
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All of the following are assumptions of the classical model EXCEPT
A) inflexible wages. B) self-interest of economic actors. C) pure competition. D) absence of money illusion.
Which of the following statements is true?
a. A monopsony is the only employer of a factor of production. b. A monopsony will pay workers a higher wage and employ fewer workers than a competitive labor market. c. A monopsony has a marginal factor cost curve which lies below its supply curve of labor. d. Unions are becoming a greater influence in American labor markets. e. All of these.
Historically, high-income countries have been the primary contributors to the greenhouse gases that cause global warming. Who are the primary contributors today?
a. Low-income countries b. Developing countries c. Middle-income countries d. High-income countries
If the demand curve faced by a firm is horizontal, then the firm is ________ and a ________.
A. perfectly competitive; price taker B. perfectly competitive; price maker C. a monopoly; price taker D. a monopoly; price maker