macro quiz 1

which of the following is not a major assumption for the neo-classical model?

• markets are competitive

• agents are rational

• money affect real output and real values

• costless and public information

labor demand is a negative function with real wage (W/P)

• True

• False

In the neo classical labor market equilibrium point, involuntary employment still can be found

• True

• False

a sudden increase in labor supply due to immigration, will cause which of the following consequence of events?

• a rise in labor demand, rise in equilibrium wage, shift in the production function, and increase in output

• a fall in labor demand, fall in equilibrium wage, shift in the production function, and increase in output

• a rise in labor supply, rise in equilibrium wage, shift in the production function, and increase in output

• a rise in labor supply, fall in equilibrium wage, more employment, and increase in output

in the following graph, draw the effect of an increase in labor productivity

from the neo-classical model, a rise in money supply will directly increase output with no effect on prices

• True

• False

write the sequence of events that result from a sudden increase in government spending in the full classical model

(mention the effect of output market,labor market, real wages and price level)