Suppose that changes in aggregate demand tended to be infrequent and that it takes a long time for the economy to return to long-run output. How would this affect the arguments of those who oppose using policy to stabilize output?
Those who oppose stabilization policy mostly argue that by the time policy can be put into action and affect aggregate demand, economic conditions may have changed so that the policy is no longer appropriate. If the economy tended to stay on one side of the natural rate of output for a long time, policymakers could worry less about lags.
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The above figure shows the market for finish carpenters in Bozeman. If there is a minimum wage set at $18, which of the following statements is true?
A) Firms' surplus increases with the minimum wage. B) Workers who retain their jobs have their wages rise. C) The market is efficient. D) The quantity supplied of workers is less that quantity demanded. E) Unemployment decreases because firms employ their workers more carefully.
Even if college imparted no additional knowledge to its graduates, they are likely to earn more because _____
a. firms like to say they only hire college graduates b. of the connections that one makes in college c. a college degree sends a signal of innate ability to employers d. their parents help them get a job