Suppose the current equilibrium real wage is $15 an hour. Which of the following is true?
a. A real wage above $15 an hour would lead to an excess demand for labor
b. A real wage above $15 an hour would lead to an excess supply of labor
c. The real wage must fall to prevent unemployment
d. The real wage must rise to prevent unemployment
e. A real wage below $15 an hour would lead to an excess supply of labor
B
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The broadest indication of economy-wide inflation is captured by the
A) Consumer Price Index. B) Gross Domestic Product (GDP) deflator. C) Producer Price Index. D) Personal Consumption Expenditure Index.
When a perfectly competitive firm experiences zero economic profits
A) the high barriers to entry prevent further competition. B) existing firms exit the industry. C) additional firms enter the industry. D) firms have no incentive to exit or enter the industry.