What happens to the real wage rate and potential GDP if population increases?
What will be an ideal response?
An increase in population increases the supply of labor. As a result, the labor supply curve shifts rightward. The labor demand curve does not shift. The increase in the supply of labor means that employment increases and the real wage rate falls. The economy moves along its (unchanged) production function to a higher level of potential GDP.
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Most of the Fed's earnings come from
A) fees charged to financial institutions for check clearing. B) interest on the securities it holds. C) interest on discount loans. D) congressional appropriations.
For many years, AT&T required customers to rent telephones from AT&T in order to receive phone service. This is an example of:
a. price discrimination. b. a tying contract. c. an interlocking directorate. d. exclusive dealing.
Three economic questions must be determined in all societies. What are they? a. How much will be produced? When will it be produced? How much will it cost?
b. What will the price of each good be? Who will produce each good? Who will consume each good? c. What is the opportunity cost of production? Does the society have a comparative advantage in production? Will consumers desire the goods being produced? d. What goods will be produced? How will goods be produced? Who will get the goods produced?
When an entrepreneur introduces a new improved product that is highly valued relative to cost
a. consumers will be worse off. b. the demand for the products that are good substitutes for the new product will increase. c. some of the existing products will become obsolete and businesses producing those products will fail. d. total employment will decline if there are business failures.