In the RBC model, an adverse supply shock causes the decrease in natural real GDP to be maximized when the labor supply curve is
A) relatively steep.
B) relatively flat.
C) vertical.
D) horizontal.
D
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A major factor contributing to the growth in employee-based health insurance in the United States has been
a. greater than average economic growth leading to increased demand for labor. b. the tax free treatment of health insurance as an employee benefit. c. legislation requiring all firms to provide health insurance to all full-time workers. d. the long standing tradition in the United States of providing a generous package of benefits to all workers.
Which of the following actions of the Fed would increase the money supply?
a. The purchase of U.S. government securities. b. A reduction in the discount rate. c. A reduction in the required reserve ratio. d. All of the above are correct.
Factor markets are different from product markets in an important way because
a. equilibrium is the exception, and not the rule, in factor markets. b. the demand for a factor of production is a derived demand. c. the demand for a factor of production is likely to be upward sloping, in violation of the law of demand. d. All of the above are correct.
When does a firm's average variable cost exceed the average total cost?
A. never B. when the average variable cost is at its minimum C. when the average fixed cost is at its minimum D. when the average total cost equals the average fixed cost