Refer to Figure 14.3. Suppose the economy is initially at long-run equilibrium and the Fed increases the target inflation rate, and to hit this rate, it must reduce the real interest rate. The economy then reaches a new, short-run equilibrium point
Assuming expectations are adaptive, the next movement is best represented as a movement from A) point C to point B.
B) point C to point A.
C) point D to point C.
D) point B to point C.
D
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Suppose the equilibrium wage rate for apricot pickers is $7.00 per hour and at that wage rate the equilibrium quantity of apricot pickers employed is 14,000. If the minimum wage is set at $7.50 per hour, then the
A) quantity of apricot pickers employed increases. B) quantity of apricot pickers employed decreases. C) quantity of apricot pickers employed does not change. D) wage rate for apricot pickers decreases. E) quantity of apricot pickers demanded does not change, and the quantity of apricot pickers supplied does not change.
A payment for a resource above the opportunity cost of the resource is
A) economic rent. B) social rent. C) nominal rent. D) real rent.