The McKinley Tariff of 1890 marked the beginning of the American move toward free trade

Which of the following statements is true?

A) Firms normally prefer wage cuts over lay-offs. B) Cuts in wages boost worker morale. C) Workers normally resist increases in wages. D) Wage rigidity can cause unemployment.

In the long-run ISLM model and with everything else held constant, the long-run effect of a contractionary fiscal policy is to ________ real output and ________ the interest rate

A) not change; not change B) decrease; decrease C) decrease; not change D) not change; decrease