How could the removal of labor market distortions increase employment even if the elasticity of factor substitution is very low?
What will be an ideal response?
Reduce speculative rural-urban migration based on expected wages as in the Todaro model.
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If the CPI is currently 202, what does this tell you about inflation between last year and this year?
A) Inflation in the economy between this year and last year was 2%. B) There was deflation in the economy between this year and last year. C) The CPI measures only the level of prices in a given year, not the percentage change in prices from one year to the next. D) Inflation in the economy between this year and last year was 102%.
Philosophical foundations of the European model were provided by:
a. Adam Smith b. David Ricardo c. The theory of social market economy d. Mercantilism e. Both c and d
Which of the following schools of economic thought would advocate increasing the rate of growth of the money supply during a recession and decreasing the rate of growth of the money supply during inflations?
A. The classical school B. Keynesians C. Monetarists D. Supply-side economists
If aggregate demand increases and, as a result, real domestic output and employment increase but the price level remains unchanged, we can assume that
A. the money supply has declined. B. aggregate demand intersects aggregate supply in the Keynesian range of the aggregate supply curve. C. aggregate demand intersects aggregate supply in the intermediate range of the aggregate supply curve. D. aggregate demand intersects aggregate supply in the classical range of the aggregate supply curve.