Regardless of market structure, all firms
A) consider the actions of rivals.
B) maximize profit by setting marginal revenue equal to marginal cost.
C) produce a differentiated product.
D) have the ability to set price.
B
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In Figure 4-6 above, with IS0 shifting to IS1, movement from points 0 to 2 requires the real money supply to ________
A) rise by the same percentage as income B) fall by the same percentage as income C) remain constant D) none of the above
Assuming that as a result of observed past increases in the aggregate price level, workers' expectation of the current price level rises. Then,
a. less labor will be supplied at each money wage because with the higher expectation about the aggregate price level since a given money wage corresponds to a lower real wage. b. the firm has to pay a higher money wage in order to obtain a given quantity of labor. c. more labor will be supplied at each money wage because with the higher expectation about the aggregate price level since a given money wage corresponds to a higher real wage. d. Both a and b e. Both b and c