In the classical model, and increase in tax on firms that hired labor would
a. decrease labor demand and the real wage and increase output.
b. decrease labor supply, increase the real wage, and decrease output.
c. decrease labor demand, decrease the real wage, and decrease output.
d. reduce real wages and increase output.
C
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The figure above shows the U.S. demand and U.S. supply curves for cherries. At a world price of $2 per pound, the total imports of cherries to the United States from other nations equals
A) 200,000 pounds. B) 400,000 pounds. C) 600,000 pounds. D) 800,000 pounds. E) 0 pounds.
An unexpected shift to a more expansionary monetary policy will generally
a. stimulate aggregate demand and real output as soon as the policy is instituted. b. exert its primary impact on aggregate demand and real output 6 to 15 months in the future. c. cause inflation in the short run, but expand real output in the long run. d. increase real interest rates in the short run.