A US unemployment rate of 1.5% creates labor ____ which will cause ____
a. shortages; deflation
b. surpluses; deflation
c. shortages; inflation
d. surpluses; inflation
Ans: c. shortages; inflation
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One reason patent protection is vitally important to pharmaceutical firms is
A) successful new drugs are not profitable. If firms are not granted patents many would go out of business and health care would be severely diminished. B) the approval process for new drugs through the Food and Drug Administration can take more than 10 years and is very costly. Patents enable firms to recover costs incurred during this process. C) the high salaries pharmaceutical firms pay to scientists and doctors make their labor costs higher than for any other business. Profits from patents are needed to pay these labor costs. D) that taxes on profits from drugs are very high; profits from patent protection enable firms to pay these taxes.
Double counting includes counting value of what types of goods?
a. Intermediate and Final b. Intermediate and investment goods c. Intermediate and capital goods d. Double counting does not include the counting of any goods only services.
Which of the following goods would be likely to be bought in the same quantity even if it doubled in price?
a) shoes b) telephones c) pencils d) computers
If real GDP is less than potential GDP, then:
A. the output gap is positive. B. the actual unemployment rate is less than the natural rate of unemployment. C. the actual unemployment rate equals zero. D. the actual unemployment rate is greater than the natural rate of unemployment.