For several years, the U.S. unemployment rate has been below the European unemployment rate. Offer a Keynesian explanation for this
What will be an ideal response?
The aggregate supply curve in Europe is closer to horizontal than is the case in the United States. The labor market is less flexible in Europe due to higher unemployment benefits that reduce the incentive to work, and due to higher costs to firms for hiring workers.
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How would economists interpret the following facts? Fact: Over the past two decades the relative price of new textbooks has risen dramatically. Another fact: Record numbers of new textbooks have been purchased by students over the past two decades
A) The law of demand has been violated. B) The law of supply has been violated. C) The supply and demand process in new textbooks hasn't worked correctly. D) The demand for textbooks has increased. E) The facts aren't true.
A characteristic of outsourcing is
a. essentially the opposite of vertical integration b. likely to be profitable exactly when vertical integration is profitable c. it prevents a firm from focusing on its core competencies d. it prevents the exploitation of differing degrees of economies of scale at different points in the supply chain
A firm deciding how many hours to hire can be represented:
A. with an individual labor-supply curve. B. in the market labor-supply curve. C. with an individual labor-demand curve. D. in the market labor-demand curve.
Will it take a smaller amount of government spending to increase the level of national income if the government balances its budget or if it runs a budget deficit? Explain