If a union is able to decrease the supply of workers in a competitive labor market but the union cannot affect the demand for its members' labor, then
A) wages and the quantity of labor hired will both increase.
B) wages will increase but the quantity of labor hired will decrease.
C) wages will decrease but the quantity of labor hired will increase.
D) wages and the quantity of labor hired will both decrease.
B
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If the government of a country with a zero trade balances increases its budget deficit, then interest rates
a. rise and the trade balance moves to a surplus. b. rise and the trade balance moves to a deficit. c. fall and the trade balance moves to a surplus. d. fall and the trade balance moves to a deficit.
(a)Draw a figure, using the Keynesian IS-LM framework, of an economy in recession.(b)Now suppose the IS curve shifts up and to the right far enough that if the real interest rate is unchanged, output will increase beyond full employment. If the Fed's goal is to move output to its full-employment level, what must happen to the real interest rate? What is the effect on the price level? (c)Suppose, before the Fed can act, that the government announces a restrictive fiscal policy, shifting the IS curve down and to the left relative to its position in part (b) What is the Fed likely to do (relative to what it would do if fiscal policy wasn't restrictive) if its goal is to target full-employment output? What happens to the real interest rate relative to what it is in part (b)?
What will be an ideal response?