Consider the labor market for an industry that is initially in equilibrium. Which of the following changes can bring about a labor shortage in this industry?
a. A decrease in wage rate in another industry that uses similar labor resources
b. A decrease in wage rate on account of a government policy
c. An increase in the demand for the good produced by firms in this industry
d. A decrease in the productivity of existing workers under the influence of unions
c
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When a bank receives $100,000 in new deposits, the amount of loans the bank can make is limited by
A) the Treasury Department. B) federal law. C) its desired reserve ratio. D) the annual federal budget. E) state law, with banks in different states being able to make different amounts of loans.
If the expected earnings of an investment project exceed all expenses except interest payments,
A) business firms will not undertake the project. B) business firms will undertake the project and raise prices later. C) business firms will not undertake the project but will borrow the funds. D) consumers will get lower prices.