Starting from short-run equilibrium, wage rates rise. What is the effect on the price level and Real GDP in the short run?
A) The price level rises and Real GDP falls.
B) The price level falls and Real GDP rises.
C) The price level rises and Real GDP rises.
D) The price level falls Real GDP falls.
A
You might also like to view...
The self-correcting tendency of the economy means that falling inflation eventually eliminates:
A. exogenous spending. B. recessionary gaps. C. expansionary gaps. D. unemployment.
Which of the following will most likely result from an unanticipated decrease in aggregate supply due to unfavorable weather conditions in agricultural areas?
What will be an ideal response?
Answer the following statement true (T) or false (F)
1) The Securities and Exchange Commission's supervision of Wall Street financial firms is a possible example of regulatory capture. 2) Economists widely support deregulation of industries that tend toward monopoly or generate substantial negative externalities. 3) Deregulation is seen as a solution to regulatory capture because it eliminates the regulatory agency that can or has been captured. 4) Government loan guarantees tend to socialize gains and privatize losses. 5) Government guarantees that socialize losses and privatize gains tend to encourage risky and imprudent investment.
When a new firm begins production in the ________ model, it assumes its demand curve is the market demand less the amount the other firm is selling.
A. price leadership B. cartel C. Cournot D. collusion