Which of the following is likely to happen when the Fed raises the federal funds rate?
A) The long-run interest rate will fall. B) The labor demand curve shifts to the left.
C) The volume of economic activity will increase. D) The labor demand curve shifts to the right.
B
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Microeconomics deals with the analysis of all the following questions except how:
a. the wages of carpenters are determined. b. high did unemployment rise during the Great Depression. c. does Ford decide how to price its cars. d. does a college student decide how to spend her income. e. do monopolies and competitive markets differ.
The pre-Keynesian or classical economic theory predicted that in the long-run the economy would experience:
a. long periods of high unemployment. b. rising rates of inflation. c. only temporary periods of high unemployment. d. idle factors of production.