Over the past several years, the earnings gap between high-skilled and low-skilled workers has (i) narrowed because the demand for unskilled labor has risen over time relative to the demand for skilled labor. (ii) widened because the demand for skilled labor has risen over time relative to the demand for unskilled labor. (iii) narrowed because the supply of unskilled labor has risen over time
relative to the supply of skilled labor. (iv) widened because the supply of skilled labor has risen over time relative to the supply of unskilled labor.
a. (i) only
b. (ii) only
c. (i) and (iii) only
d. (ii) and (iv) only
b
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When people change their minds about what they want simply because of the timing of the decision, economists refer to it as:
A. time inconsistency. B. information overload paradox. C. cost-price inconsistency. D. time barriers to optimization.
If income rises and the demand for a product remains unchanged, the income elasticity of demand for that product is unit elastic
a. True b. False
With deflation, people will
A. delay their purchases of goods in hopes prices will fall further. B. feel compelled to borrow money. C. see their paycheck rise as bosses seek to reward high performers. D. buy goods earlier than they had originally planned.
Inflation will
A) decrease the quantity of real GDP demanded. B) decrease aggregate demand. C) increase the quantity of real GDP demanded. D) increase aggregate demand.