Consider a labor market in equilibrium. If the demand curve shifts to the right while the supply curve shifts to the left, then the wage rate in the market will:
A. increase.
B. decrease.
C. remain unchanged.
D. either increase or decrease or remain unchanged.
Answer: A
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Starting from long-run equilibrium, a large tax increase will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. recessionary; lower; potential B. expansionary; lower; potential C. expansionary; higher; potential D. recessionary; lower; lower
The marginal product is defined as:
a. The ratio of total output to the amount of the variable input used in producing the output b. The incremental change in total output that can be produced by the use of one more unit of the variable input in the production process c. The percentage change in output resulting from a given percentage change in the amount d. The amount of fixed cost involved. e. None of the above
One reason for the huge investment by China into the US economy is the:
A. the desire of China to ‘sink’ the US economy. B. Chinese investors view that US investments are less stable. C. large savings rate in China that encourage capital outflow. D. low savings rate in China which makes the cost of borrowing very low in China.
Which of the following is true of minimum-wage laws?
a. They affect skilled workers' wages. b. They create above-equilibrium wages for some unskilled workers. c. They create a shortage of unskilled labor. d. They negatively affect the employment of skilled workers.