Collective bargaining agreements that prohibit wage cuts for the duration of the contract contribute to:
A. an increase in aggregate supply.
B. a price level that is inflexible downward.
C. a multiplier effect.
D. a wealth effect.
Answer: B
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Answer the following questions true (T) or false (F)
1. If you purchase a share of stock from your friend who initially purchased the stock three years ago, your purchase of the stock represents a transaction in the secondary financial market. 2. Direct finance includes the sale by a corporation of stocks or bonds, but does not include borrowing money from a bank. 3. You purchase a share of Facebook stock from a friend who purchased the stock 1 year ago. Your purchase of the stock represents a transaction in the primary financial market.
The underground economy
A) is measured by government officials through tax returns. B) is difficult to describe but easy to measure. C) includes production that uses illegal workers who are paid less than minimum wage. D) includes mining production. E) is estimated by the government and the estimate is part of official GDP.