Question

When a minimum-wage law and labor unions force the wage to remain above the level that balances supply and demand, it__. A. raises the quantity of labor supplied and raises the quantity of labor demanded compared to the equilibrium level. B. raises the quantity of labor supplied and reduces the quantity of labor demanded compared to the equilibrium level. C. reduces the quantity of labor supplied and raises the quantity of labor demanded compared to the equilibrium level. D. reduces the quantity of labor supplied and reduces the quantity of labor demanded compared to the equilibrium level. QUESTION 41 gap, and when it is negative, it represents gap. When the output gap is positive, it represents A. a recessionary, an expansionary B. an inflationary, an employment C. an inflationary, a contractionary D. an employment; an unemployment QUESTION 42 Which of the following best describes the effect on the SRAS curve if political negotiations result in a substantial decrease in the price of oil? A. The SRAS curve shifts rightward. B. The SRAS curve does not shift but there is an upward movement along it. C. The SRAS curve does not shift but there is a downward movement along it. D. The SRAS curve shifts leftward.

Answer 1

40. B

At minimum wage, quantity supplied exceeds quantity demanded which creates surplus.

41. A

42. A

Decrease in price of oil decreases cost of  production and results in increase in short run aggregate supply.