Wages for Workers Producing IPods and Similar Products Will Rise

question 498

Multiple Choice

Wages for workers producing iPods and similar products will rise next year. Walkman Watch asks you to predict the effect of this change in next year's market for iPods. You predict that the major effect will be that the

• A) demand curve for an iPod will shift leftward.
• B) supply curve for an iPod will shift rightward.
• C) demand curve for an iPod will shift rightward.
• D) supply curve for an iPod will shift leftward.

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Definitions:

Monetary Policy

The process by which a government, central bank, or monetary authority manages the supply of money and interest rates to achieve specific economic objectives.

Fed's Actions

Measures taken by the Federal Reserve to influence the U.S. economy's money supply and interest rates.

Net Exports

Spending on domestically produced goods by foreigners (exports) minus spending on foreign goods by domestic residents (imports).

Central Bank

An institution that manages a country's currency, money supply, and interest rates, usually with the aim of managing inflation and ensuring financial stability.