Exam 7:The Economy at Full Employment

A decrease in the supply of labor will ________ real wages and ________ employment.

Recall the Application about the level of real wages for laborers in England from 1350 to 1550 to answer the following question(s). In 1348, the bubonic plague, also known as the Black Death, arrived in England from Asia and caused a long decline in total population through the 1450s. -According to this Application, the decline in population caused by the Black Death resulted in ________ real wages and ________ total output.

Suppose bad weather in Florida unexpectedly results in a much smaller citrus crop than had been projected. The reduction in the supply of Florida citrus fruit would tend to

Which of the following factors is likely to increase the amount of available labor and decrease the real wages of workers?

Explain the difference between nominal wages and real wages.

Suppose bad weather in Florida unexpectedly results in a much smaller citrus crop than had been projected. This would cause the ________ labor to pick citrus fruit in Florida to ________.

If the demand for labor ________, real wages fall and the amount of labor employed ________.

Suppose bad weather in Florida unexpectedly results in a much smaller citrus crop than had been projected. This would tend to cause the labor supply curve for citrus pickers to

In practice, increases in government spending in an open economy can crowd out

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

Real business cycle theory emphasizes that shocks to technology can play a big part in causing economic fluctuations.

As a result of an increase in the enforcement of illegal immigration laws, the demand for labor will ________, the supply of labor will ________, and the real wage will ________.

If the real wage rises,

The downward sloping labor demand curve demonstrates that as the ________ increases the ________ decreases.

If there was a positive technological shock which increased the demand for labor, then

Recall the Application about European soccer stars choosing to play for clubs in countries with lower tax rates to reduce their taxes to answer the following question(s). A study conducted by economists Henrik Jacobsen Kleven, Camille Landais,and Emmanuel Saez found that top tax rates and tax breaks do matter when soccer stars choose where to locate. -Recall the Application. If country A has a lower overall income tax rate than country B, and labor can freely and easily move between the two countries, real wages in country A will tend to ________ and employment in country A will tend to ________.

What two factors need to increase in order to increase potential output in an economy?

If a change in government spending causes "crowding in" in an open economy, which of the following might increase in addition to consumption and investments?

Suppose that a new tax on hiring labor is imposed. The demand for labor will ________, and as a result real wages will ________ and employment will ________.

Increases in the real wage will lead workers to supply more hours of labor.