The wage paid to labor should increase when:
a. the capital/labor ratio increases.
b. the capital/labor ratio decreases.
c. a country's labor force increases.
d. a country's capital stock decreases.
Ans: a. the capital/labor ratio increases.
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Assuming expectations are adaptive, the next movement is best represented as a movement from A) point C to point B. B) point C to point A. C) point D to point C. D) point B to point C.
Suppose the economy is initially operating at full employment. A reduction in the size of the budget deficit will cause which of the following in the short run?
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