As a large number of students graduate from college, which category of unemployment
would increase?
a. Seasonal unemployment
b. Structural unemployment
c. Frictional unemployment
d. Cyclical unemployment
e. They will have no effect on unemployment
In the long run, the interest rate is determined in the money market.
A high-wage country cannot afford free trade with a low-wage country. The high- wage
country will either be undersold or its workers will be forced to accept lower living
standards.
If the Fed conducts an open market purchase of bonds, which of the following will
happen?
a. The interest rate will decrease, the aggregate expenditure line will shift upward, and
the aggregate demand curve will shift leftward.
b. The interest rate will increase, the aggregate expenditure line will shift upward, and
the aggregate demand curve will shift rightward.
c. The interest rate will decrease, the aggregate expenditure line will shift upward, and
the aggregate demand curve will shift rightward.
d. The interest rate will decrease, the aggregate expenditure line will shift downward,
and the aggregate demand curve will shift rightward.
e. The interest rate will increase, the aggregate expenditure line will shift downward,
and the aggregate demand curve will shift leftward.
Figure 7-6 shows the total cost for six different levels of output for a particular firm.
Total fixed cost (TFC) if five units of output are produced is
Just as greater leverage multiplies a bank’s potential profits, it also multiplies a bank’s
potential losses.
If output grows faster than the population, the average standard of living will
a. rise
b. fall
c. remain the same
d. stagnate
e. rise and then fall
The difference in unemployment rates between Europe and the U.S. has been narrowing
partly because
a. tax rates in European countries are generally lower.
b. economic conditions in Europe and the U.S have been converging.
c. European and American labor unions have been coordinating their activities.
d. of a change in labor market policies.
e. Europe has been making it easier for workers to gain unemployment benefits
Private investment expenditure, adds to the nation’s existing stock of capital.
The aggregate production function shows us that increasing the number of workers
employed will increase output at a constant rate.
In the short run, a monopolistic competitor can