If the money wage rate and the price level both rise by the same proportion, then in the figure above the potential GDP line ________, and the aggregate supply curve ________
A) shifts rightward; does not shift
B) does not shift; shifts rightward
C) shifts rightward; shifts rightward
D) shifts rightward; shifts leftward
E) does not shift; shifts leftward
E
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During recessions, GDP falls and unemployment increases. Why might the actual output produced not fall as much as officially measured GDP during recessions?
a. There is an increase in involuntary part-time employment during recessions, the output from which is not accounted for in GDP b. Workers who became unemployed during the recession may produce goods in the underground economy c. Unemployment benefits to laid off workers are included in GDP d. Laid off workers may start their own businesses, but profit income from self-employment is not accounted for in GDP e. Unemployed workers have more leisure time to enjoy.
The error term in a regression equation is said to exhibit homoskedasticty if _____.
A. it has zero conditional mean B. it has the same variance for all values of the explanatory variable C. it has the same value for all values of the explanatory variable D. if the error term has a value of one given any value of the explanatory variable
Which of the following is NOT a possible solution to the problem of pollution?
A) subsidizing the costs of production of activities that generate pollution B) converting a resource that is communally owned into a privately owned resource C) regulating the quantity of pollution that can be generated D) imposing a pollution tax on producers
Due to automatic stabilizers, when the nation's total income rises, government transfer spending:
A. Increases and tax revenues decrease B. Decreases and tax revenues increase C. And tax revenues decrease D. And tax revenues increase