In the fooling model's labor market diagram, from an initial intersection point of the labor supply and demand curves, tracing "northeast" up the labor supply curve shows
A) what happens to real wages and employment when aggregate demand expands.
B) what happens to real wages and employment when aggregate demand contracts.
C) what workers think is happening to real wages if an aggregate demand expansion fools them.
D) what firms think is happening to real wages if an aggregate demand expansion fools them.
C
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Refer to the scenario above. Tom should use ________ to play this game
A) backward induction B) forward induction C) mixed strategies D) his dominated strategy
Assume that aggregate supply meets aggregate demand in the upward sloping portion of the AS curve. For each of the following, graph the change in aggregate supply and/or aggregate demand, and state the effect on prices and output. 1. The demand for U.S. exports increases. 2. Taxes increase. 3. Businesses become less optimistic about the future. 4. The labor force increases. 5. Costs of production
increase. What will be an ideal response?