The economy of Alpha operates according to Okun's law. In Alpha, potential GDP equals $500 billion, actual GDP equals $480 billion, and the natural rate of unemployment is 5 percent. What is the actual rate of unemployment in Alpha?
A. 3 percent
B. 7 percent
C. 1 percent
D. 4 percent
Answer: B
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Which of the following is NOT one of the components for computing GDP based upon the income approach?
A) investment B) corporate profits C) compensation of employees D) net interest
Voluntary exchange requires that there must be mutual gain
a. True b. False Indicate whether the statement is true or false
In order for the law of diminishing returns to be present, we must have
a. at least one factor of production to be fixed. b. output decreasing as more laborers are hired. c. the price of labor increasing as more workers are hired. d. simultaneous changes in labor and capital. e. double the output when labor input is doubled.
Refer to the accompanying figure. Suppose the solid line represents the current supply of Star Wars action figures. If the price of the plastic used to make action figures rises, current supply will:
A. not change because a change in the price of plastic will not affect the demand for action figures. B. shift to S(A). C. not change; only the quantity supplied will change. D. shift to S(B).