When jobs are hard to find, profits are low, few wage increases are given, and many companies go out of business, the economy is most likely in a(n):
A. shortage.
B. expansion.
C. boom.
D. recession.
Answer: D
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When there is a recessionary gap, inflation will ________, in response to which the Federal Reserve will ________ real interest rates, and output will ________.
A. decline; lower; decline B. increase; raise; decline C. decline; lower; expand D. decline; raise; decline
Stan owns a software design business. He does not have time to expand his office space or redesign the layout of his office
He can increase the amount of work he does by working more hours, asking his current employees to work more hours, or hiring more employees. The relationship between Stan's inputs and the maximum output his firm can produce is called his A) short-run production function. B) cost function. C) long-run production function. D) production possibilities frontier.
The Romer model is distinct from the Solow model in that the former assumes that ________
A) technology is fixed B) an increase in price affects quantity demanded, rather than demand C) some labor is devoted to producing new technology D) output per worker is fixed
A monopoly firm can sell as much output as it wants at whatever price it sets
a. True b. False Indicate whether the statement is true or false