Suppose the labor market is competitive, the supply curve of labor is upward sloping, and the amount of capital is fixed. If the output market changes from a competitive market to a monopoly, what is the effect on its demand for labor? Explain
What will be an ideal response?
A monopoly will decrease output from the competitive level and thus hire fewer workers. This reduction in the demand curve for labor will result in lower wages.
Economics
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The main reason that the deficit grows in a recession is that
a. the government reacts quickly and adjusts taxes to compensate. b. monetary policy that targets interest rates causes the costs of borrowing to fall. c. the deficit causes the recession, and reducing the deficit cures the recession. d. many forms of taxes act as automatic stabilizers.
Economics
The MPC can be used to predict the effect of a tax increase.
Answer the following statement true (T) or false (F)
Economics