Evaluate the statement that “unexpected declines in demand, with inflexible prices, generate a rise in unemployment and a fall in output.”
What will be an ideal response?
In the presence of inflexible prices, unexpected declines in demand force companies to reduce their output and/or increase their inventories. The decline in output produced makes it necessary for firms to reduce their number of employees as they now need fewer workers to produce the lower amounts of output demanded. Positive changes in inventory levels eventually force companies to reduce production to less than optimal output levels and generate layoffs.
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If the U.S. government places tariffs on imports from countries that have been accused of deliberately undervaluing their currencies, the price of these imports will ________ and the demand for the undervalued currency will ________
A) rise; fall B) fall; rise C) rise; rise D) fall; fall
Ethyl does not like redheads and refuses to hire any at her business. Paul was the perfect job candidate on paper, but the personal interview revealed that he was a redhead. Are there any costs to Ethyl for not hiring Paul?
If the multiplier is 5.25, then the MPC is
a. 0.19. b. 0.68. c. 0.81. d. 0.84.
Figure 9-3
Suppose that British incomes rise relative to incomes in the United States. Then, in
a.
the demand curve will shift from D1 to D2
b.
the demand curve will shift from D2 to D1
c.
the supply curve will shift from S1 to S2
d.
the supply curve will shift from S2 to S1
e.
neither the demand for nor the supply curve will shift