What is the relationship between the natural unemployment rate, the unemployment rate, potential GDP, and actual GDP?
What will be an ideal response?
When the economy is at potential GDP, the unemployment rate is the natural unemployment rate. If actual GDP is less than potential GDP, then the unemployment rate exceeds the natural unemployment rate. And if actual GDP exceeds potential GDP, then the unemployment rate is less than the natural unemployment rate.
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Which of the following influences the slope of the LM curve?
A) The interest-sensitivity of money demand B) The interest-sensitivity of investment C) The interest-sensitivity of government spending D) The interest-sensitivity of saving
In some industries, like insurance, both small and very large firms coexist and compete quite effectively in the market. This indicates that the long-run average total cost curve in these industries
a. is "U" shaped. b. is downward sloping over all levels of output. c. exhibits constant returns to scale over a wide range of output. d. exhibits diseconomies of scale beginning at a low rate of output.
If a U.S. textbook publishing company sells texts overseas, U.S. net exports
a. increase, and U.S. net capital outflow increases. b. increase, and U.S. net capital outflow decreases. c. decrease, and U.S. net capital outflow increases. d. decrease, and U.S. net capital outflow decreases.
Economists do not think price discrimination is unfair because
A. people with higher incomes should pay higher prices than those with lower incomes. B. if the prices charged to some buyers get too high, those who are able to buy at lower prices will just resell their purchases to the people facing the high prices. C. economists are concerned with efficiency rather than fairness. D. more buyers are able to purchase the good with price discrimination, some buyers pay a lower price than if there were a single price, and sellers earn higher profit than if there were a single price.