Author Question: In practice, the Board of Governors and the chairperson of the Federal Reserve have the real control ... (Read 18 times)

rayancarla1 · **on:** Jun 30, 2018

In practice, the Board of Governors and the chairperson of the Federal Reserve have the real control over monetary policy.

Indicate whether the statement is true or false

Question 2

a. Everything else remaining unchanged, if there is no wage rigidity in the market, how will equilibrium employment and wage rate change if there is a leftward shift in the demand curve for labor?

b. Everything else remaining unchanged, if there is no wage rigidity in the market, how will equilibrium employment and wage rate change if there is a rightward shift in the supply curve of labor?

dajones82 · **Reply #1 on:** Jun 30, 2018

Answer to Question 1

TRUE

Answer to Question 2

a. Everything else remaining unchanged, and in the absence of wage rigidity, a leftward shift in the demand curve for labor will result in a lower equilibrium wage rate and a lower equilibrium employment level.
b. Everything else unchanged, and in the absence of wage rigidity, a rightward shift in the supply curve of labor will result in a lower equilibrium wage rate and a higher equilibrium employment level.