Based on our understanding of the wage setting equation, which of the following will not cause a reduction in the nominal wage?
A) an increase in unemployment
B) a reduction in the expected price level
C) a reduction in expected productivity
D) all of the above
E) none of the above
Question 2
Based on our understanding of the model presented in Chapter 3, a reduction in investment will cause
A) an increase in the multiplier.
B) a reduction in the multiplier.
C) a reduction in the marginal propensity to save.
D) a reduction in output.
E) both B and D
There are several laws of thermodynamics critical to understanding physical processes. Two of those
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