Okun's law expresses the relationship between:
A. unemployment and inflation.
B. cyclical unemployment and the output gap.
C. frictional unemployment and structural unemployment.
D. the money supply and the velocity of money.
Answer: B
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The MRTS for isoquants in a fixed-proportion production function is:
A) zero or one. B) always zero. C) always one. D) zero or undefined.
In which of the following cases does the aggregate-demand curve shift to the right?
a. The price level rises, causing the interest rate to fall. b. The price level falls, causing the interest rate to fall. c. The money supply increases, causing the interest rate to fall. d. The money supply decreases, causing the interest rate to fall.
The presence of efficiency, minimum and union wages
A) can explain job rationing because they lower the real wage rate below equilibrium. B) does not affect job rationing because they affect only the amount of job search. C) can explain job rationing because they raise the real wage rate above equilibrium. D) can explain job rationing because they lower the natural unemployment rate. E) cannot explain job rationing because they are a natural part of the economy.
The wealth effect refers to
A) the impact of household real wealth on consumption, savings, and the IS curve. B) the impact of household real wealth on money, prices, and the LM curve. C) the impact of household real wealth on short term and long term interest rates. D) the impact of household real wealth on aggregate supply curve.