When we look at real GDP since 1970 or so, we see that recessions are evenly spaced over the years.
a. true
b. false
Answer: b. false
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Unemployment benefits in western Europe are more generous than in the United States. As a result, ________ in the United States
A) frictional unemployment is higher B) frictional unemployment is lower C) cyclical unemployment is higher D) structural unemployment is higher E) avoidable unemployment is lower
Firms A and B can conduct research and development (R&D) or not conduct it. R&D is costly but can increase the quality of the product and increase sales
The payoff matrix is the economic profits of the two firms and is given above, where the numbers are millions of dollars. A's best strategy is to A) conduct R&D regardless of what B does. B) not conduct R&D regardless of what B does. C) conduct R&D only if B conducts R&D. D) conduct R&D only if B does not conduction R&D.
If Gambinia has many workers but very little land and even less productive capital, then, following the Heckscher-Ohlin model, in order to improve the country's economic welfare, the Gambinian government should
A) engage in free trade. B) protect the capital-intensive product. C) protect the land-intensive product. D) protect the labor-intensive product. E) discontinue all international trade.
Risk diversification refers to the process by which:
A. people organize themselves in a group to collectively absorb the cost of the risk faced by each individual. B. insurance companies change the risk aversion of their clients. C. risks are shared across many different assets or people, reducing the impact of any particular risk on any one individual. D. insurance companies reallocate the likelihood of catastrophes happening.