A 20 percent increase in the wage rate induces firms in an industry to reduce quantity demanded for labor by 5 percent in the first year. Five years later we would expect, other things constant,
A) the reduction in the quantity demanded of labor to be much greater than 5 percent.
B) the reduction in the quantity demanded of labor to be less than 5 percent.
C) the reduction in the quantity demanded of labor to be about 5 percent.
D) the quantity demanded of labor to be back to its original level.
A
You might also like to view...
Deposit insurance is a protection for bank depositors up to a certain amount which is guaranteed by the federal government
Indicate whether the statement is true or false
Suppose the desired reserve ratio is 10 percent. If the Commerce Bank has total deposits of $20,000, total assets of $10,000, and actual reserves of $8000, the amount of excess reserves is
A) $100. B) $6,000. C) $2,000. D) $0. E) $800.
When protection is encouraged to protect a growing domestic industry; which of the following is being used?
A) Anti-dumping argument B) Save domestic jobs argument C) National security argument D) Infant-industry argument E) Diversity and stability argument
In the intertemporal model with money, the optimal amount of money is
A) equal to total output. B) equal to consumption and investment. C) zero. D) irrelevant as long as it is not zero.