Wages tend to be sticky
a. because of contracts, social norms, and notions of fairness.
b. because of contracts, but not social norms or notions of fairness.
c. because of social norms and notions of fairness, but not contracts.
d. None of the above are correct.
a
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What is stagflation, and how does it occur? How is stagflation represented in the aggregate demand-aggregate supply model?
What will be an ideal response?
If a monopolist's price were $8, it is likely that in equilibrium
A. MC = MR, and both are less than $8. B. MC = MR, and both are more than $8. C. MC = MR, and both are equal to $8. D. None of the choices are correct.
Refer to the given figure.
If the Federal Reserve wants to lower the interest rate to 3 percent, it must ________ the money supply to ________.
A. increase; 900 B. increase; 300 C. decrease; 300 D. increase; 700
The Ricardian equivalence theorem suggests that an increase in the government budget deficit created by a tax cut will
A. decrease real Gross Domestic Product (GDP) in the short run, but increase it in the long run. B. increase real Gross Domestic Product (GDP) in both the short and long run. C. increase real Gross Domestic Product (GDP) in the short run, but decrease it in the long run. D. have no effect on real Gross Domestic Product (GDP) in either the short run or the long run.