Other Things Equal, When the Supply of Workers Is Low

question 109

Multiple Choice

Other things equal, when the supply of workers is low, one would predict that market wages would be

• A)relatively high.
• B)relatively low.
• C)determined solely by factors that affect demand.
• D)determined outside the domain of economic theory.

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Definitions:

Small Stocks

These are shares of companies with a relatively small market capitalization, often considered to be more volatile but potentially offering higher returns compared to larger companies.

Long-Term Bonds

Bonds with a longer maturity period, typically more than 10 years, offering potentially higher yields but increased interest rate risk.

Treasury Bill

A short-term government security issued at a discount from the face value and pays no interest before maturing at its face value.

Effective Annual Rate

The interest rate on a loan or investment, adjusted for the effect of compounding over a one-year period.