As wages for manufacturing workers rise, wages for service workers will stay the same
a. True
b. False
Indicate whether the statement is true or false
False
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Full employment is the rate of employment that results when:
a. all the labor resources of the economy are employed full time. b. cyclical unemployment has reached its maximum. c. everybody who wants a job can find one. d. only frictional and structural unemployment are present.
A liquidity trap exists when a change in the money supply immediately and drastically affects interest rates.
a. true b. false
When the price of one fruit increases, consumers buy more of another fruit. This situation is an illustration of:
a. The rationing function of prices b. The income effect c. The substitution effect d. Diminishing marginal utility
Using Figure 1 above, if the aggregate demand curve shifts from AD1 to AD2 the result in the long run would be:
A. P1 and Y2. B. P2 and Y2. C. P3 and Y1. D. P2 and Y3.