Suppose that the demand for labor decreases due to an economic downturn, and union workers are in the first year of a 3-year labor contract
With respect to these union laborers, the economic downturn will most likely ________ the nominal wage and ________ the quantity of labor hired. A) decrease; not change
B) decrease; decrease
C) not change; decrease
D) not change; not change
C
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The working-age population consists of all the people in the population
A) aged 16 and over. B) aged 16 to 65. C) aged 16 and over who are not in jail, hospital, or an institution or in the U.S. Armed Forces. D) aged 21 and over who are not in jail, hospital, or an institution or in the U.S. Armed Forces. E) who are employed plus the unemployed people.
Which of the following statements is TRUE about the interest rate effect?
A) The interest rate effect is why the aggregate demand curve is upward sloping. B) A lower price level lowers the interest rate, which causes businesses and consumers to increase their desired spending. C) A higher price level lowers the interest rate, which causes business and consumers to increase their desired spending. D) Expenditures will change as a result of a change in the real value of money balances when there is a change in the price level.