When there is only a weak link between work effort and reward
a. individuals will undertake fewer projects that create income.
b. taxing the rich and distributing the money to the poor becomes the best way to increase the size of the economic pie.
c. corporations will profit more.
d. individuals have a strong incentive to undertake projects that generate income.
A
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The shift of the short-run Phillips curve in the figure above is the result of
A) an increase in the natural unemployment rate. B) a decrease in the expected inflation rate. C) a decrease in the actual inflation rate. D) an increase in the expected inflation rate. E) a decrease in the natural unemployment rate.
The wage rate is the price of a unit of labor. What happens to the quantity of labor supplied if the wage rate increases?
A. It increases. B. It decreases. C. It does not change. D. Uncertain-economic theory has no answer to this question.