Which of the following would tend to lessen the wage gap between a country's skilled and unskilled workers?
a. technology increases the productivity of unskilled workers more than that of skilled workers
b. the country increases trade with countries that have a higher proportion of skilled workers
c. both A and B
d. neither A nor B
c
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The housing market crash that accompanied the 2007-2009 recession has had severe negative effects on the U.S. economy. Since December 2008, the target federal funds rate has been 0.0-0.25%
Assuming the Fed keeps the real interest rate constant, a recovery in the housing market would cause the ________, and the output gap would ________. A) MP curve to shift up; become less negative B) MP curve to shift down; become more negative C) IS curve to shift to the left; become more negative D) IS curve to shift to the right; become less negative
According to the supply-side economists, a cut in the marginal income tax rate would cause
a. labor supply to rise, output to rise, and the price level to fall. b. labor supply to rise, the price level to rise, and output to fall. c. labor supply to fall, the price level to rise, with output unchanged. d. labor supply to rise, the price level to fall, with output unchanged.