Frictional unemployment is a sign of a healthy economy because
A. workers become more productive after taking vacations.
B. economic growth remains steady.
C. workers seek labor where they can provide the most value to their respective employer.
D. wages fall, which forces workers to compete.
Answer: C
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Which of the following is most liquid?
A) a share of stock B) a corporate bond C) a government bond D) a $100 bill
Excess capacity and high advertising expenditures are most likely to be encountered in
A) perfect competition. B) monopolistic competition. C) monopoly. D) both monopolistic and perfect competition.
With floating exchange rates
A) monetary policy is effective. B) fiscal policy is ineffective. C) monetary and fiscal policy are effective. D) fiscal and monetary policy are ineffective.
The ________ hypothesis suggests that errors in forecasting future inflation rates are due to random, unpredictable events.
A. chaos-theory B. stagflation C. rational-expectations D. Friedman