If the output gap equals -200 billion, then:
A. potential GDP is lower than actual GDP.
B. there is no cyclical unemployment.
C. cyclical unemployment equals the sum of structural and frictional unemployment.
D. there is a recessionary gap.
Answer: D
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The law of diminishing returns means that
a. total output will increase, but at a diminishing rate b. marginal product will increase, but at a diminishing rate c. total cost will increase, but at a diminishing rate d. total revenue will increase, but at an increasing rate e. total output will decrease
The principal benefit of unemployment insurance is that it
a. reduces the occurrence of unemployment in the economy. b. replaces income lost due to unemployment. c. increases labor force participation. d. helps reduce the period of unemployment.
Economics
A. is concerned with unlimited wants. B. is concerned with limited resources. C. is a social science. D. all of these are correct.
With a human capital investment (such as the investment in going to college), the most important cost tends to be
A) foregone leisure. B) books and equipment. C) the opportunity cost of not working. D) taxes.