Moving along a short-run aggregate supply curve, resource prices ________, the money rate wage ________, and potential GDP ________
A) do not change; changes; does not change
B) do not change; does not change; changes
C) change; does not change; does not change
D) do not change; does not change; does not change
D
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Define the marginal propensity to consume (MPC) and the marginal propensity to save (MPS), and explain why MPC + MPS always equals 1
What will be an ideal response?
Suppose the labor market is in equilibrium. Which of the following statements is false?
A) The equilibrium wage rate is equal to the marginal revenue product of labor. B) Some workers will earn more than the equilibrium wage. C) At the equilibrium wage, the demand for labor is equal to the supply of labor. D) At the equilibrium wage, the quantity of labor demanded equals the quantity of labor supplied.