If real GDP is increasing at a 2 percent annual rate while the unemployment rate is 7 percent, the economy is
a. not achieving full economic potential
b. experiencing an increase of 2 percent in real annual per capita GDP
c. experiencing a slump
d. experiencing high prices and low inflation
e. producing along its production possibilities frontier
A
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In the long run a company that produces and sells organic tofu incurs total costs of $1,200 when output is 1,200 units and $1,650 when output is 1,400 units. The tofu company exhibits
a. diseconomies of scale because total cost is rising as output rises. b. diseconomies of scale because average total cost is rising as output rises. c. economies of scale because total cost is rising as output rises. d. economies of scale because average total cost is falling as output rises.
Suppliers would be less eager to organize to restrict output if they faced a:
A. more elastic demand. B. perfectly inelastic demand. C. less elastic demand. D. unit-elastic demand curve.
Which of the following identifies an important reason why empirical studies find that joining the European Economic Community (EEC) in 1973 may have imposed a substantial net cost on Britain?
A. Removal of trade barriers on imports from Australia and New Zealand B. Trade creation for British manufactured goods C. Withdrawal of subsidies received by British farmers D. Trade diversion on agricultural products
The monopolistically competitive seller maximizes profit by producing at the point where:
A. total revenue is at a maximum. B. average costs are at a minimum. C. marginal revenue equals marginal cost. D. price equals marginal revenue.