Frictional unemployment arises when
A) unskilled or low-skilled workers find it difficult to obtain desirable, long-term jobs.
B) labor must be reallocated from industries that are shrinking to areas that are growing.
C) workers must search for suitable jobs and firms must search for suitable workers.
D) output and employment are below full-employment levels.
C
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The profit maximizing rule P = MC applies to:
A. both perfectly competitive firms and imperfectly competitive firms. B. all firms. C. perfectly competitive firms only. D. monopolists only.
Human capital is defined as the
A) amount of machinery human beings have. B) number of factories built for human beings. C) accumulated skill and knowledge of human beings. D) accumulated amount of machinery and factories human beings own. E) skills that people are born with.
Usually, increased government spending for war increases inflationary pressures. The principal reason that inflation occurred during the Vietnam War and not during World War II was the existence, during World War II, of
a. full employment. b. government ownership of factories. c. full production. d. wage and price controls. e. high levels of patriotism.
When constructing a basic macroeconomic model, several assumptions (not realistic, but necessary to simplify the analysis) are made. Which of the following are assumed to be constant?
a. the price level b. the rate of interest c. the foreign exchange rate d. the level of government spending e. All of the above are held constant.