In Macroland, 500 000 of the 1 million people in the country are employed. Average labour productivity in Macroland is $20 000 per worker. Real GDP per person in Macroland totals:
A. $1000
B. $10 000
C. $15 000
D. $20 000
Answer: B. $10 000
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The length of time before policymakers realize they need to intervene in the economy is called the
A) recognition lag. B) implementation lag. C) impact lag. D) liquidity lag.
During an economic expansion, real GDP ________ and unemployment ________
A) increases; increases B) increases; decreases C) decreases; increases D) decreases; decreases
Middlemen, such as grocers, stockbrokers, and realtors
a. specialize in reducing transactions costs. b. provide nothing of value to either the buyer or the seller. c. have no effect on economic output in society. d. do not exist in capitalist economies.
In the presence of a negative externality, a specific tax can achieve the social optimum because
A) output is reduced to zero as a result. B) it internalizes the external cost. C) it directly charges the producer for polluting. D) the price of the good rises by the full amount of the tax.