Explain how a reduction in the unemployment rate will affect bargaining power and nominal wages
What will be an ideal response?
As the unemployment rate decreases, it is easier for individuals to find employment at other firms. So, workers' bargaining power will increase. As bargaining power increases, the nominal wage will increase.
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For the Jones household it has been estimated that for every ten degrees increase in the outdoor temperature the consumption of ice tea increases by 5 glasses
What type of relationship exists between temperature change and the consumption of ice tea? A) negative relationship B) positive relationship C) no relationship D) maximum relationship
In the long run, a reduction in labor supply would cause output to ________ and the aggregate price level to ________
A) fall; rise B) fall; fall C) rise; fall D) rise; rise