The real wage rate is $35 an hour. At this wage rate there are 100 billion labor hours supplied and 200 billion labor hours demanded. There is a
A) shortage of 300 billion hours of labor.
B) shortage of 100 billion hours of labor.
C) surplus of 100 billion hours of labor.
D) surplus of 300 billion hours of labor.
E) shortage of 200 billion hours of labor.
B
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At an interest rate of 4 percent, what would be the present value of receiving $4,000 four years from now?
A) $3,420 B) $3,637 C) $3,704 D) $3,847
Deviations from purchasing power parity will be increasingly higher as international trade tariffs become more restrictive. This is mainly because:
a. arbitrage activities become less profitable. b. governments discourage purchasing power parity. c. the interest rate parity fails to hold. d. goods become more differentiated across countries. e. individuals develop hatred toward closed economies.
If both borrowers and lenders anticipate the rate of inflation correctly, then
a. borrowers will lose real income. b. lenders will lose real income. c. both borrowers and lenders will lose real income. d. neither borrowers nor lenders will lose real income.
The inflow of foreign investment into the United States
A. Signals a lack of confidence in the U.S. economy. B. Diminishes production possibilities for the United States. C. Stimulates more economic growth for the United States. D. Has no effect on the U.S. economy.