The high-school dropout rate usually declines in an economic recession because
A) a decline in job opportunities lowers the opportunity cost of remaining in high school.
B) high schools begin to offer more practical and relevant courses.
C) laws are passed to prevent teenagers from entering the labor market.
D) recessions increase the demand for education.
E) tuition and book prices usually fall in a recession.
A
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An expansionary monetary policy shifts the LM curve to the ________, reducing ________, everything else held constant
A) left; output and increasing interest rates B) left; both real output and interest rates C) right; both interest rates and real output D) right; interest rates and increasing real output
The slope of the utility possibilities frontier is
A) positive. B) negative. C) zero. D) undefined.
Which of the following situations defines a cartel?
a. Market forces that discourage or prevent potential competitors from entering the market b. A regulated monopoly with intellectual property protections c. A group of firms with a formal agreement to collude on price and output d. A firm that uses sharp but temporary price cuts to discourage new competition
The Prime Minister of Richlandia hires you as an economic consultant. He is concerned that the output level in Richlandia is too low and that this will cause unemployment to rise. He feels that it is necessary to increase output by $20 billion. He tells you that the MPC in Richlandia is 0.75. Which of the following would be the best advice to give to the Richlandian Prime Minister?
A. Increase government purchases in Richlandia by $5 billion. B. Reduce taxes in Richlandia by $4 billion. C. Increase government purchases in Richlandia by $15 billion. D. Reduce taxes in Richlandia by $10 billion.