Labor is a resource that is necessary to produce many goods. "If the price of labor falls," says the economist, "the prices of goods will soon follow." How does this work?
A) If the price of labor falls, the supply of goods rises, and the prices of those goods fall.
B) If the price of labor falls, the quantity supplied of goods rises, and the prices of those goods fall.
C) If the price of labor falls, the demand for goods falls, and the prices of those goods fall.
D) If the price of labor falls, the demand for goods rises, and the prices of those goods fall.
E) If the price of labor falls, the supply of goods falls, and the prices of those goods fall.
A
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The 2009 fiscal stimulus bill represented approximately
a. 5.5% of GDP and was designed to close the expansionary gap. b. 5.5% of GDP and was designed to close the recessionary gap. c. 7.8% of GDP and was designed to close the expansionary gap. d. 7.8% of GDP and was designed to close the recessionary gap.
Generally, a firm is more willing and able to increase quantity supplied in response to a price change when
a. the relevant time period is short rather than long. b. the relevant time period is long rather than short. c. supply is inelastic. d. the firm is experiencing capacity problems.