Why is unemployment a problem?
What will be an ideal response?
Unemployment is a problem for both the nation and for the unemployed worker. For the nation, unemployment represents lost production and lost incomes. The lost income is also a major problem for the unemployed worker. In the long run, the worker also suffers a loss of human capital which can permanently damage the worker's future job prospects.
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Government works to create a competitive marketplace to help foster competition, yet it also awards patents which prevent competition. Why are both competition and the patent system essential to creating a large economic pie?
What will be an ideal response?
An increase in the money supply, all else held constant, usually ________.
A. increases the interest rate and increases aggregate demand
B. decreases the interest rate and increases aggregate demand
C. increases the interest rate and decreases aggregate demand
D. decreases the interest rate and decreases aggregate demand
If a firm gets so large that management of employees and other resources becomes a costly problem, it will be experiencing
A. diseconomies of scale. B. constant returns to scale. C. diminishing marginal product. D. economies of scale.
A depositor places $5,000 in cash in a commercial bank, and the reserve ratio is 20 percent; the bank sends the $5,000 to the Federal Reserve Bank. As a result, the reserves and excess reserves of the bank have been increased, respectively, by:
A. $5,000 and $1,000 B. $5,000 and $4,000 C. $5,000 and $5,000 D. $4,000 and $4,000