If the Labour Market Is in Equilibrium and Then the Labour

question 65

Multiple Choice

If the labour market is in equilibrium and then the labour supply curve shifts rightward,

• A)there will be a surplus of labour at the original equilibrium wage rate.
• B)the equilibrium wage rate will rise.
• C)there will be a surplus of jobs at the new equilibrium.
• D)there will be a shortage of labour at the original equilibrium wage rate.

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Definitions:

Nominal Interest Rate

The rate of interest charged on loans or paid on savings before adjusting for inflation, reflecting the face value rate.

Real Interest Rate

The interest rate adjusted for inflation, representing the true cost of borrowing or the true return on savings.

Anticipated Inflation

The rate of inflation that consumers and firms expect in the future, often based on past inflation rates and current economic conditions.

Price Level

A measure of the average prices of goods and services in an economy, reflecting the purchasing power of money and the inflation rate.