In a properly operating, dynamic economy
What will be an ideal response?
we would expect to have some unemployment due to normal structural and frictional factors
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Which of the following is an imperfection of market economies?
a. They produce inexpensive services but expensive manufactured goods. b. They place undue importance on the needs of future generations. c. They cannot provide certain goods such as national defense. d. They distribute income too unequally.
Diminishing marginal product occurs when
a. the increases to total output are declining. b. marginal product is negative. c. total output is decreasing. d. All of the above are correct.
The theory of economic growth focuses on the
A. growth of real income equality in the long run; not on the growth of real income in the short run. B. growth of resources in the long run, not on the efficiency of resource use in the short run. C. growth of potential output over the long run, not on fluctuations in the level of economic activity in the short run. D. advancements in technology over the long run, not on short-run increases in real GDP.
Cost-push inflation is
A. inflation caused by decreases in aggregate supply that generate an even larger decrease in aggregate demand. B. inflation caused by increases in aggregate demand that are not matched by increases in aggregate supply. C. inflation caused by increases in aggregate demand that generate an even larger increase in aggregate supply. D. inflation caused by decreases in aggregate supply that are not matched by decreases in aggregate demand.