When the economy is operating at an output beyond its full-employment potential, the
a. actual level of unemployment will exceed the natural rate of unemployment.
b. actual level of unemployment will equal the natural rate of unemployment.
c. strong demand for resources will place upward pressure on resource prices.
d. aggregate demand will increase until full employment is restored.
C
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Answer the following statement(s) true (T) or false (F)
1. Producer's surplus is equal to total revenue minus consumer's surplus. 2. The efficiency criterion is normative in nature. 3. According to the efficiency criterion, when a policy creates both winners and losers, it will be preferred to the status quo as long as the winners' gains outweigh the losers' losses. 4. A given level of output is efficient if no more social gain can be obtained from changing the output level. 5. A $5 per unit sales tax is bad for consumers because it implies that the total amount (price plus tax) that they must pay increases by $5.
For nations with relatively high wage rates,
a. the wage costs per unit of a good produced are usually relatively high. b. foreign exporters have an unfair advantage over domestic producers. c. tariffs would improve the allocation of scarce resources. d. the wage rates often reflect relatively high labor productivity.
Economists usually assume that ________ is a fixed input in the _______ run.
A) labor; short B) capital; short C) labor; long D) capital; long
Refer to Figure 23.5 for a perfectly competitive firm. If this firm produces the level of output corresponding to point B in the short run, it will earn
A. The maximum profit possible. B. A loss. C. Zero economic profit. D. A profit, although not the maximum profit possible.