Should there be an official definition of a depression? If so, how should it be defined?
What will be an ideal response?
Since the United States has not experienced a major cycle since World War II, students may argue that there is no need for an official definition of a depression. Alternatively, students may argue for an official definition that would spark more serious government intervention than would be used to combat a recession.
Students might suggest a definition in terms of time, such as a falling real GDP that lasts for four quarters (compared to the two declining quarters that define a recession). They might also suggest defining it in terms of the intensity of the trough, such as a 3 or 5 percent decline in the real GDP or an unemployment rate in excess of 10 percent.
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The quantity of labor supplied increases as the real wage rises because
A) higher real wages mean that nominal wages have increased. B) the opportunity cost of working increases. C) the quantity of labor demanded increases. D) labor force participation decreases so that only serious workers are left in the labor force. E) the opportunity cost of leisure rises.
The concept of comparative advantage applies:
a. only to people with at least a high school diploma. b. only to people who are currently employed. c. to situations in which you have information about the salary levels of those with whom you are competing for a job. d. to every case of trade or exchange. e. only to goods that are sold in the domestic market.
What reasons would economists give for an increase in the natural rate of unemployment that could have occurred from 2007 to 2011? What argument would suggest that the natural rate of unemployment may not have risen?
What will be an ideal response?
Services can be thought of as
A) unvalued goods. B) unwanted goods. C) free goods. D) intangible goods.