Exam 7:The Economy at Full Employment

An increase in the amount of capital in the economy will shift the demand curve for labor to the left.

Potential output in an economy decreases as the supply of labor decreases or the capital stock increases.

Crowding out refers to

Suppose the stock of capital remains constant. By adding more labor, perhaps a second work shift, output

An increase in the employment tax will have no effect on output if the labor supply curve

The difference between exports and imports in GDP is called

Table 7.1 Assume the stock of capital is held constant. -Table 7.1 exemplifies the principle of

Suppose that a technological decline makes labor less productive. What is likely to happen to wages and to potential output?

Table 7.1 Assume the stock of capital is held constant. -Refer to Table 7.1. As labor inputs increase from 5 to 6, output

The level of output produced when the labor market is in equilibrium is called

If the government liberalizes immigration policies, the demand for labor will ________, the real wage will ________, and the quantity of labor hired will ________.

An open economy refers to an economy with

What assumptions are made concerning wages and prices in a classical economic model?

The main effect of a decrease in labor demand that arises from a decrease in capital stock is

The real business cycle theory emphasizes that in today's modern age, ________ technology plays a significant role in causing economic fluctuations.

When there is a decrease in labor supply, real wages are likely to

The ________ curve shows a(n)________ relationship between the real wage and the number of workers who are willing to work.

The nominal wage is the wage rate adjusted for changes in the price level.

Suppose the government cracks down on illegal immigration. How will this affect the demand and supply of labor.

Full-employment output is also called