Which of the following is TRUE of unemployment?
A. The result is that the economy operates inside its production possibilities curve.
B. There are psychological consequences associated with unemployment.
C. It is defined as the number of people actively looking for work who do not have jobs.
D. All of these.
Answer: D
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Households increase the quantity of labor supplied when the
A) real wage rate rises because the opportunity cost of not working rises. B) income tax rises because an increase in the income tax increases the demand for labor. C) nominal wage rate falls because the opportunity cost of not working rises. D) nominal wage rate rises because the real wage rate must also rise. E) real wage rate rises because the opportunity cost of not working falls.
The typical age-earnings cycle shows that
A) there is a positive relationship between age and earnings that eventually turns into a negative relationship. B) there is a constant positive relationship between age and earnings. C) there is a constant negative relationship between age and earnings. D) there is no relationship between age and earnings.
The official poverty line is defined as:
a. one-half the average family income. b. one-third the average family income. c. three times the cost of a minimal food requirement. d. two times the cost of a minimal food requirement.
According to the rational expectations approach , if policy makers consistently stimulate aggregate demand when real output falls below the economy's potential output, then people will not be able to anticipate the effects of this policy on the price level, unemployment, and the real output level
a. True b. False Indicate whether the statement is true or false