Youland is hit by a recession. What will be the impact of a countercyclical policy on labor demand in Youland if nominal wages are downwardly rigid?
What will be an ideal response?
If Youland is hit by a recession, its labor demand curve will shift to the left. Since wages are downwardly rigid, there will be a sharp fall in employment due to the recession. However, a countercyclical policy can partially reverse this situation by shifting the labor demand curve back to the right. The countercyclical policy will be more effective in this case than in the case of flexible wages because the full force of the expansionary policy will impact employment.
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The table above shows information about the costs and benefits of a steel smelter that pollutes the air of a city. The market is efficient when the quantity of steel produced is ________ tons per week
A) 5 B) 10 C) 15 D) 20 E) 25
Gus happens to spot a couple of sunbathers during his walk in the park. The sunbathers generate
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