If the supply of labor increases while demand for labor is unchanged,
A) the real wage and labor productivity will increase.
B) the real wage will decrease and labor productivity will increase.
C) the real wage will increase and labor productivity will decrease.
D) the real wage and labor productivity will decrease.
D
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Suppose the economy is initially in long-run and short-run equilibrium. If the Fed decides to pursue a contractionary monetary policy, we will see
A) bond prices fall, interest rates fall, aggregate demand remains unchanged as consumption spending decreases, but investment spending increases. GDP remains constant in both the short run and the long run, but the price level falls in both. B) bond prices fall, interest rates rise, aggregate demand falls as investment and consumption spending decrease, and real GDP and the price level decreasing in the short-run, but only the price level decreasing in the long run. C) bond prices fall, interest rates rise, aggregate demand falls as investment spending decreases and consumption spending remains unchanged, and real GDP and the price level decrease in the short run, but only the price level falls in the short run. D) interest rates rise but no change in bond prices. Aggregate demand falls as consumption spending and investment spending decrease, and the price level and real GDP fall in both the short run and the long run.
The capital account records all international purchases and sales of stocks, bonds, real estate, businesses, and bank accounts
a. True b. False Indicate whether the statement is true or false