In the AD-AS framework, long-run equilibrium implies that ________
A) quantity demanded equals quantity supplied at a moderate level of equilibrium inflation
B) quantity demanded equals quantity supplied at a point consistent with the short-run equilibrium level of inflation
C) quantity demanded equals quantity supplied at a point consistent with the natural rate of unemployment
D) all of the above
E) none of the above
C
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Which statement is true?
A. The recessions of 1973-1975 and 1981-1982 were both mild. B. The recessions of 1973-1975 and 1981-1982 were both severe. C. The recession of 1973-1975 was mild; the recession of 1981-1982 was severe. D. The recession of 1973-1975 was severe; the recession of 1981-1982 was mild.
Since the "winners" from free trade can more than compensate the "losers" why does it matter if wages and employment fall when a country engages in free trade?
What will be an ideal response?
You have been hired by an attorney to perform an economic analysis of lost wages in a wrongful death suit. The case involves an insurance agent, John Doe, who was killed in an auto accident a few days after his 59th birthday. Mr
Doe could have expected to earn $75,000 this year. Data suggest that the income of insurance agents has risen an average of 6% over the past 20 years. Mr. Doe's expected retirement age was 65, i.e., on his 65th birthday. Available data provide the mortality rates given below for individuals of Mr. Doe's sex and occupation at various ages. Ten percent appears to be the appropriate discount rate. Age Mortality Rate 59 0.06 60 0.075 61 0.09 62 0.10 63 0.12 64 0.15 65 0.16 a. Calculate the present discounted value of Mr. Doe's expected earnings stream. (For simplicity, assume he receives all of his earnings for the preceding year on his birthday.) b. The attorney has asked your advice regarding a minimum figure that should be accepted as an out-of-court settlement. What guidance can you give the attorney? Would additional information allow you to give the attorney a more precise estimate of the figure that should be accepted? Give an example of how more information would help. c. You must be prepared for cross-examination by the defendant's attorney. Where would you expect the opposing attorney to attack your testimony?
If the elasticity of supply is much greater than the elasticity of demand, a subsidy awarded to demanders will
a. benefit the demanders more than the suppliers b. benefit the suppliers more than the demanders c. the benefit of the subsidy will be equally shared between the demanders and the suppliers d. allow the demanders to be the only ones who will benefit e. Without more information as to the amount of the subsidy, who will benefit more can not be determined