A high degree of real wage flexibility will tend to reduce the cost to a country of joining a currency union because ?

A. All of the reasons given in these answers are correct
B. real wages fall rapidly in a recession and the economy moves quickly back to long run equilibrium so limiting the duration of the recession even when exchange rate adjustment is not possible
C. workers will move from a country in which aggregate demand falls to other countries of the currency union, and so unemployment remains lower than it otherwise would
D. real wages fall and so offset the inflationary effect of switching from the old currency to the new common currency

Related Mcqs:

The term ‘real wage’ means the money wage” ?
A. after tax
B. allowing for change in prices.
C. Plus, benefits in kind
D. plus, overtime payments.
Suppose the price level falls but because of fixed nominal wage contracts the real wage rises and firms cut back on production This is a demonstration of the ?
A. sticky-wage theory of the short-run aggregate supply curve
B. classical dichotomy theory of the short-run aggregate supply curve
C. misperceptions theory of the short-run aggregate supply curve
D. sticky-price theory of the short run aggregate supply curve
The economists who emphasised wage flexibility as a solution for unemployment were ?
A. new-Keynesian.
B. post-Keynesian.
C. classical economists.
D. Keynesian.
Trade creation will more likely outweigh trade diversion for Country X that forms a customs union if the level of tariffs in Country X prior to the customs union is ________ and the total number of countries forming the customs union is _________?
A. relatively high; relatively large
B. relatively high; relatively small
C. relatively low ; relatively large
D. relatively low ; relatively small
If the real wage is too high in the labour market ?
A. The quantity demanded of labour is higher than the quantity supplied
B. The quantity demanded of labour equals the quantity supplied
C. The quantity demanded of labour is lower than the quantity supplied
D. It will automatically adjust in the short run to bring equilibrium
The government increase the minimum wage. The National Association of Fast Food Restaurants hires you to determine the impact that this higher minimum wage will have on it industry. This is an example of ?
A. industry equilibrium analysis
B. specific equilibrium analysis
C. partial equilibrium analysis
D. general equilibrium analysis
Which one of the following types of Unemployment results from the wage being held above the competitive equilibrium wage ?
A. Structural unemployment
B. Cyclical Unemployment
C. Frictional Unemployment
D. None of these answers
E. Sectoral Unemployment
If the minimum wage is set above the equilibrium wage rate, then another thing unchanged ?
A. There will be equilibrium in the labour market
B. There will excess demand in the labour market
C. There will be excess supply in the labour market
D. More people will be employed
If, for any reason the wage is held above the competitive equilibrium wage?
A. The quantity of labour supplied will exceed the quantity of labour demanded and there will be Unemployment
B. Unions will likely Strike and the wage will fall to equilibrium
C. The quantity of labour demanded will exceed the quantity of labour supplied and there will be a labour shortage
D. The quality of workers in the applicant pool will tend to fall
If in Pakistan real GDP/person in 2004 is Rs18,073 and real GDP/person is 2005 is Rs18,635 What is the growth rate of real output per person over this period ?
A. 3.1 percent
B. 3.0 percent
C. 18.6 percent
D. 18.0 percent