We don't typically see wages ________ in response to an economic downturn because ________.
A. fall; they are "sticky" and are slow to respond to shifts in the economy
B. fall; they cannot fall below where they were previously set due to inflation
C. rise; they cannot rise above the equilibrium in any circumstance
D. rise; they are "sticky," and are slow to respond to shifts in the economy
Answer: A
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In the short run, a monopolistically competitive firm chooses
A) both its price and its quantity. B) its price but not its quantity. C) its quantity but not its price. D) neither its price nor its quantity.
Monetarists contend that the channels of monetary influence in Keynesian structural models are too ________ defined, ________ the importance of monetary policy
A) broadly; exaggerating B) broadly; understating C) narrowly; understating D) narrowly; exaggerating
Which of the following best describes the law of diminishing returns?
a. The principle that beyond some point the marginal product decreases as additional units of a variable factor (ex: labor) are added to a fixed factor (ex: a restaurant kitchen). b. The concept that as a person consumes more and more of a good, such as pizza slices, that the marginal utility from each additional slice will decline. c. The empirical fact that the profitability of firms declines in the long run due to increasing competition. d. None of the above.
Which of the following may result in a higher equilibrium price for a product?
a. Advertising b. Expectations c. Imperfect information d. All of the above answers are true. e. None of the above answers a.-c. are true.