In Classical economic theory, full employment is thought to be restored in the long-run because:
a. If unemployment were anywhere but at full employment, the government and central bank would react and have time to move the economy to where it should be.
b. The natural forces of supply and demand in the labor force change the real wage and eliminate labor surpluses and deficits.
c. Antitrust legislation will have time to take effect and to solve any economic imbalances.
d. International organizations, such as the International Monetary Fund, step in to ensure the nation returns to full employment.
e. None of the above is correct because Classical economic theory does not believe that an economy will move automatically toward full employment in the long run.
.B
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Whenever people's incomes increase, they buy more guitars. Hence a scatter diagram shows that the relationship between income and guitars purchased is
A) a positive relationshi
In the market for British pounds, if the current exchange rate is above the equilibrium rate,
a. there is an excess supply of pounds and those who hold pounds will be able to sell them and make a profit b. there is an excess supply of pounds and the exchange rate will fall c. there is an excess demand for pounds and suppliers will not be able to supply enough pounds to meet the demand d. there is an excess demand for pounds and the exchange rate will rise e. the quantity of pounds supplied is barely sufficient to meet the quantity demanded
In class action lawsuits, interested parties to the lawsuit are not required to pay attorney fees directly. This is an example of an attempt to
a. maximize attorney fees. b. reduce the incentive of attorneys to file class action lawsuits. c. reduce the transaction costs of finding a private solution to an externality. d. regulate attorney fees.
Recall the Application about the harmattan and how it affects the price of cocoa to answer the following question(s).According to this Application, the dry dust wind known as the harmattan has caused ________ of cocoa pods.
A. a decrease in the supply B. an increase in the supply C. an increase in the demand D. a decrease in the demand