In the fooling model's labor market diagram, from an initial intersection point of the labor supply and demand curves, tracing "northwest" up the labor demand curve shows
A) what happens to real wages and employment when aggregate demand expands.
B) what happens to real wages and employment when aggregate demand contracts.
C) what workers think is happening to real wages if an aggregate demand expansion fools them.
D) what firms think is happening to real wages if an aggregate demand contraction fools them.
B
You might also like to view...
Suppose the marginal propensity to consume is 0.80 and taxes decrease by $10 billion. Which of the following is true?
a. Disposable income and consumption fall by $10 billion b. Disposable income and consumption rise by $10 billion c. Disposable income rises by $10 billion and consumption rises by $8 billion d. Disposable income falls by $10 billion and consumption falls by $8 billion e. Disposable income rises by $10 billion and consumption falls by $8 billion
For the Bureau of Labor Statistics to place someone in the "unemployed" category, that person must
a. be available for work. b. have tried to find employment during the previous week. c. have previously been employed. d. All of the above are correct.