The economy is at full employment. If aggregate demand increases,
A) an inflationary gap is created and the AS curve shifts leftward as the money wage rate rises.
B) an inflationary gap is created and the AD curve shifts leftward.
C) an inflationary gap is created and potential GDP increases to close the ga
A
Economics
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The theory of efficiency wages asserts that
a. employers set wages based on each employee's productivity. b. employers strive to hold wages below equilibrium levels. c. employers may find it profitable to pay above-equilibrium wages. d. efficient workers actually earn lower wages than those earned by inefficient workers.
Economics
Which would increase investment demand?
a. An increase in business optimism b. A rise in the real interest rate c. An increase in production costs d. An increase in business taxes
Economics