The figure above shows the U.S. supply of labor curve. What was the effect of the decline in birth rates during the 1960s and 1970s on the supply of labor curve in the 1980s?
A) a leftward shift of the supply of labor curve
B) a rightward shift of the supply of labor curve
C) a movement downward along the supply of labor curve from a point such as A to a point such as B
D) The supply of labor curve became steeper.
E) None of the above answers is correct because there was no change in the supply of labor curve.
A
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Suppose Motorland's government imposes a tax of $1.50 per gallon of gasoline sold. With the tax, when the market is in equilibrium, the deadweight loss is
A) zero. B) $37,500 per month. C) $150,000 per month. D) $75,000 per month.
Over the next three years, the expected path of 1-year interest rates is 4, 1, and 1 percent. The expectations theory of the term structure predicts that the current interest rate on 3-year bond is
A) 1 percent. B) 2 percent. C) 3 percent. D) 4 percent.