The inflation rate
a. explains how prices are reacting to economic policies
b. indicates the level of prices charged by all firms in the economy
c. measures the annual percent increase in the average level of prices
d. measures how fast wages and incomes are rising
e. determines the prices that firms will offer to customers
In the long run, a monopolistic competitor will
Government re-training programs, such as those that train workers who have lost their
jobs due to outdated skills, would best fight the problem of
a. frictional unemployment
b. cyclical unemployment
c. structural unemployment
d. underemployment
e. seasonal unemployment
What would a leftward shift of the labor demand curve indicate?
a. Firms want to hire more workers than before at any given wage than before.
b. Firms want to pay a higher wage than before at any given level of employment.
c. Households want to supply fewer hours of work than before at any given wage rate.
d. Firms want to hire fewer workers than before at any given wage rate.
e. Households want to supply more hours of work than before at any given wage rate.
In a market economy, most of what we consume is obtained by
A labor market differs from a product market because
In the long run, entry ensures that the typical monopolistically competitive firm will
The two defining characteristics of pure private goods are
If food is measured on the horizontal axis of budget line diagram, and clothing is
measured on the vertical axis, an increase in
Which of the following is the best example of an intermediate good?
a. a new fighter jet purchased by the federal government
b. tires purchased by an automobile manufacturer for installation on new cars
c. a new saw purchased by a carpenter
d. screwdrivers purchased by a homeowner for home repairs
e. aprons purchased by restaurant chefs
Suppose that a consumer used to be at point S on budget line BB’ in Figure 5-5, and is
now at point R on line AA’. Which of the following is true?
If the pound-dollar exchange rate is 2 pounds per dollar, what is the rate of dollars per
pound?
a. 4 dollars/pound
b. 2 dollars/pound
c. 5 dollars/pound
d. 0.50 dollars/pound
e. 2.50 dollars/pound
What is a good historical example of when the Fed created a recession to reduce
inflation expectations?
a. In the early 1980s
b. In the early 1960s
c. During the Great Depression
d. In the late 1920s
e. During World War II
Since 1933, bank failures have occurred
a. frequently
b. very rarely
c. once every 3 years
d. every year
e. once every 5 years