The Figure Above Shows a Labor Market in Which a Union

question 146

Multiple Choice

The figure above shows a labor market in which a union has formed.
-Labor unions' support for increasing the minimum wage represents an attempt to shift the

• A) labor demand curve from LD0 to LD1.
• B) labor demand curve from LD1 to LD0.
• C) labor supply curve from LS0 to LS1.
• D) labor supply curve from LS1 to LS0.
• E) None of the above answers is correct.

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Definitions:

Excess Reserves

The reserves that banks hold in excess of the required minimum, often held in the central bank, which can lend them out to generate interest.

New Loans

Any sums of borrowed money that have recently been provided by a lender to a borrower.

Reserve Requirement

The minimum amount of reserves a bank must hold against deposits, set by the central bank, influencing the money supply and banking stability. A rephrased definition since "Required Reserves" is a similar concept.

Open Market Purchase

An activity by a central bank to buy securities in the open market to increase the money supply and stimulate economic growth.