If the aggregate supply curve is upward-sloping, a decrease in aggregate demand will cause
A. A decrease in the price level and an increase in unemployment.
B. An increase in the price level and a decrease in unemployment.
C. An increase in the price level and an increase in unemployment.
D. A decrease in the price level and a decrease in unemployment.
Answer: A
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An efficiency wage is a wage that:
A. the government sets deliberately above the market rate to increase equity. B. most unionized workers negotiate to get rid of. C. is deliberately set above the market rate to increase worker productivity. D. is set right at market equilibrium which creates an efficient labor market.
Over the past 50 years, the growth of real GDP in the United States has been caused primarily by increase in the _____.
Fill in the blank(s) with the appropriate word(s).
Self-correcting mechanism reveals that
A. real wages will increase if there is an increase in price. B. nominal wages will fall if there is inflationary gap. C. nominal wages will increase if there is recessionary gap. D. in the long run economy will be in equilibrium at potential GDP.
Which of these motivate a firm to use nonmarket transactions to acquire inputs and downstream services?
A. Imposition of low tax rates on a particular production unit B. Zero transaction costs in the spot market C. Steady supply of the key input used in production D. Absence of market power