During a period when output and employment is falling, the government will try to:
A. Increase tax rates
B. Increase interest rates
C. Reduce government spending
D. Stimulate borrowing and spending
D. Stimulate borrowing and spending
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Suppose that there is a decrease in the costs of production that shifts the short-run aggregate-supply curve right. If there is no policy response, then eventually
a) because unemployment is high, wages will be bid up and short-run aggregate-supply curve will shift right. b) because unemployment is high, wages will be bid down and short-run aggregate-supply curve will shift right. c) because unemployment is low, wages will be bid up and short-run aggregate-supply curve will shift right. d) because unemployment is low, wages will be bid up and short-run aggregate-supply curve will shift left.
The returns to education are
A) lowest in developing nations. B) highest in developing nations. C) never reflected in the wages of workers. D) highest in developed nations.