The FE Line Is Vertical Because the Level of Output

question 45

Multiple Choice

The FE line is vertical because the level of output at full employment doesn't depend on the

• A)real wage rate.
• B)level of employment.
• C)marginal product of labour.
• D)real interest rate.

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Definitions:

Integrator

In homeostasis, a control center.

Effector

(1) A muscle or gland that contracts or secretes in direct response to nerve impulses. (2) In homeostasis, an organ or process that helps restore a steady state.

Set Point

A normal condition maintained by homeostatic mechanisms.

Steady State

A condition where the variables (such as concentration of substances) in a system remain constant over time despite ongoing processes that attempt to change them.