Explain why price and wage stickiness in the short run are reasons that macroeconomic shocks can result in fluctuations in total employment and total production
What will be an ideal response?
A macroeconomic shock which slows the economy will decrease the demand for labor and decrease the demand for goods and services. If prices are sticky, then instead of lowering prices to increase the quantity demanded, the sticky price will result in a surplus of product, thereby reducing total production until the surplus is eliminated. If wages are sticky, firms will lay off workers instead of lowering wages for all workers, resulting in a surplus of workers, or a larger number of unemployed workers.
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When the nominal interest rate rises, the
A) quantity of money demanded decreases. B) demand for money decreases. C) demand for money increases. D) quantity of money demanded increases.
When a transfer price decreases
a. the buying division will want to sell less to the selling division b. the buying division will want to sell more to the selling division c. the selling division will want to sell less to the buying division d. the selling division will want to sell more to the buying division
Proprietary technology is technology that is
a. widely used because it is easy to learn. b. widely used because the government subsidizes its use. c. not widely used because people could, but have not, taken the time to learn how to apply it. d. not widely used because it is known or controlled only by the company that discovered it.
A cooperative game is
A. the manner in which one oligopolist reacts to a change in price made by another oligopolist in the industry. B. a game in which firms will not negotiate in any way. C. companies colluding in order to make higher than competitive rates of return. D. when plans made by firms are known as game strategies.