If there is 3 percent frictional unemployment, 4 percent structural unemployment, and ?2 percent cyclical unemployment, then the natural rate of unemployment equals:
A. 1 percent.
B. 7 percent.
C. 2 percent.
D. 5 percent.
Answer: B
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Positive economic statements
A) prescribe what should be. B) are related only to microeconomics. C) can be tested against the facts. D) cannot be tested against the facts.
All of the following were significant changes in the mortgage market in the 2000s EXCEPT
A) investment banks became significant participants in the secondary mortgage market. B) lenders loosened lending standards. C) mortgage-backed securities became more popular with investors. D) borrowers tended to increase the amount of their down payments.
If the demand curve for a good always has unitary price elasticity, what does this imply about consumer behavior?
A) Consumers do not react to a price change. B) Consumers will spend a constant total amount on the good. C) Consumers are irrational. D) Consumers do not obey the Law of Demand.
If a cartel firm is producing the agreed upon quantity, they are producing at a level where ________.
A) the difference between marginal revenue and marginal cost (MR - MC) is negative B) their marginal cost exceeds their marginal revenue C) their marginal revenue equals their marginal cost D) their marginal revenue exceeds their marginal cost