Question

answers the question crease in taxes bot vers the question. 17) When the policy rate increases 17) A) IS curve shifts to the right. B) IS curve shifts to the left. C) IS curve does not change. D) LM curve shifts downward. E) LM curve shifts upward. 18) Which of the following does not represent a "labor market rigidity" to which critics refer when discussing unemployment in Europe? A) restrictive monetary and fiscal policies B) generous unemployment insurance O relatively high minimum wages D) a high degree of employment protection E) none of the above 18) 19) 19) Efficiency wage theory suggests that A) unskilled workers will have a lower tumover rate than skilled workers. B) workers will be paid less than their reservation wage. O firms will be more resistant to wage increases as the labor market tightens. D) productivity might drop if the wage rate is too low. E) the government can only set tax rates so high before people will prefer not to work. 20) When the unemployment rate is low, we would expect that A) the probability of losing a job is high. B) the separation rate will increase. C) the probability of losing a job is low. D) the probability an unemployed individual will find another job is low. 20) 21) Which of the following individuals would be considered unemployed? A) an individual who is not working and is not looking for work B) an individual who works only part-time C) an individual who works full-time in a family business, but is not paid D) all of the above E) none of the above 21) 22) When the policy rate decreases, A) LM curve shifts downward. B) IS curve does not change. C) IS curve shifts to the left. D) LM curve shifts upward. E) IS curve shifts to the right. 22) e espih

Answer 1

17) LM curve shift upward since output is less

18) restrictions ve monetary and fiscal policy is not an example of labor market rigidity rest all like unemployment insurance causing incentivising unemployment, high minimum wages forcing lower job supply, and high employment protection forcing lower job supply in first place all represent labor market rigidity

19) efficiency wage theory suggests that higher wages than efficient wage leads to increase in productivity or lower cost hence lower wages will lower productivity option D is correct

20) With low unemployment rate probability ofblosing a job will be low since there will be not enough skilled candidates in the market hence option D is correct

21) answer E is correct since person who is not looking for job is not a candidate for job and hence not unemployed ,part-time is employed and same goes with the person working in family business