In the non-market-clearing model, "involuntary" unemployment results because
A) real wages are too high.
B) real wages rise when aggregate demand increases.
C) real wages fall when aggregate demand increases.
D) wages and prices are sticky.
D
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An increase in the capital stock would shift the production function _______ and the long-run aggregate supply curve to the _______.
A. upward; right B. upward; left C. downward; left D. to the right; right
Pam graduates from law school and gets a position in a law firm. At the same time the price of hamburger falls while other food prices have stayed the same. She notices that she buys less hamburger than she did before. Is she violating the law of demand?
A. No, since other things are not held constant, such as her income. B. Yes, since she is buying less hamburger at a lower price. C. No, since the law of demand refers to relative price changes and the price of hamburger falling is an absolute price change. D. Yes, since she is buying less hamburger in a relatively short period of time and we wouldn't expect her tastes to have changed.