An adverse supply shock would directly ________ labor productivity by changing the amount of output that can be produced with any given amount of capital and labor
It would also indirectly ________ average labor productivity through changes in the level of employment. A) increase; increase
B) increase; decrease
C) decrease; increase
D) decrease; decrease
C
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Within the AD/AS model, which one of the following adjustments will cause the economy to return to its long-run capacity when output is temporarily greater than the economy's long-run potential?
a. Lower wage rates and resource prices reduce short-run aggregate supply. b. Lower interest rates increase aggregate demand and, thereby, stimulate output. c. Higher wage rates and resource prices reduce short-run aggregate supply. d. A decrease in prices reduces aggregate demand.
Refer to the following graph.
In New York City, the rent on many apartments is set below market rates. As a result, many people find that the only way to obtain an apartment is to make illegal payments to landlords. If Pc is the controlled rent, a best estimate of such "key" money is shown as:
A. Pf. B. Pf minus Pc. C. Pe. D. Pe minus Pc.