A union that pursued a policy of restricting entry over time into the union would
A) see real wages hold constant over time at whatever premium they could get initially.
B) also have to negotiate to be sure that all the members were able to find jobs.
C) generate rising real wages for its membership over time as long as demand for union workers increased over time.
D) fail to obtain benefits for their workers in excess of what the workers would get under open markets.
Answer: C
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A) decrease; decrease B) increase; increase C) decrease; increase D) increase; decrease
When the housing bubble began to burst in 2006, investors became
A) more likely to purchase mortgage-backed securities since mortgage values had declined significantly, making the securities a better value. B) less likely to purchase mortgage-backed securities since the default rate on mortgages began to rise. C) more likely to purchase mortgage-backed securities since the higher rate of return made these investments much more profitable. D) less likely to purchase mortgage-backed securities since the government virtually took over the mortgage market.