What causes cyclical unemployment?
a. workers searching for suitable jobs and firms looking for suitable workers
b. the persistent mismatch of workers’ skills and the requirements of jobs
c. short-term cyclical fluctuations in the economy
d. short-term seasonal fluctuations in the job market
c. short-term cyclical fluctuations in the economy
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To achieve long-run equilibrium in an economy with a recessionary gap, without the use of stabilization policy, the inflation rate must:
A. not change. B. increase. C. decrease. D. either increase or decrease depending on the relative shifts of AD and AS.
Demand is said to be inelastic when
A. the absolute value of the price elasticity of demand exceeds 1. B. an increase in price results in a reduction in total revenue. C. a reduction in price results in an increase in total revenue. D. a reduction in price results in a decrease in total revenue.
The test statistic used to test the hypothesis of whether a regression coefficient is significantly different from zero, holding all other independent variables constant, is called a(n):
A) F-test. B) autocorrelation test. C) multicollinearity test. D) t-test.
Which of the following are policies that can affect natural unemployment?
a. adjust interest rates b. provide welfare assistance c. adjust availability of money and loans d. increase aggregate demand