Moving along the AS curve, when the price level increases, the
A) nominal wage rate falls, and there is an increase in the quantity of real GDP supplied.
B) real wage rate rises, and there is an increase in the quantity of real GDP supplied.
C) nominal wage rate rises, and there is a decrease in the quantity of real GDP supplied.
D) real wage rate falls, and there is an increase in the quantity of real GDP supplied.
E) real wage rate rises, and there is a decrease in the quantity of real GDP supplied.
D
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Refer to Figure 23-1. According to the figure above, at what point is aggregate expenditure less than GDP?
A) J B) K C) L D) none of the above
An efficiency wage premium serves the same function as a bond because, just as with a bond, the premium represents
A) the amount the employee loses if caught shirking. B) the expected value of the amount the employee loses if he shirks. C) the cost of monitoring the employee. D) the gain to the employee if he shirks.