A characteristic of the unemployment rate is that ________
A) it typically goes up in a recession
B) it typically goes down in a boom
C) it is not clear whether it is a leading or a lagging indicator
D) all of the above
E) none of the above
D
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The table above gives four production possibilities for airplanes and cruise ships. In possibility A, how many resources are devoted to the production of cruise ships?
A) 0 B) few C) most D) all E) It is impossible to tell without more information about the prices of airplanes and cruise ships.
Suppose the government imposes a price ceiling on gasoline that is less than the equilibrium price. As a result
A) the price of gasoline rises to the equilibrium price. B) there is incentive for buyers to undertake search activity. C) the supply of gasoline will increase and the supply curve will shift rightward. D) the demand for gasoline will decrease and the demand curve will shift leftward.
Answer the following statements true (T) or false (F)
1. In a well-functioning "cap-and-trade system" for pollution rights, society benefits because pollution will be brought down to insignificant levels. 2. In a well-functioning cap-and-trade system for pollution rights, the right to pollute will go to those who are able to acquire the largest net benefit from using the scarce resource "clean air". 3. Asymmetric information occurs when the two parties in a market transaction do not have the same amount of information regarding the product or process involved in the transaction. 4. The licensing and regulation of financial advisers is one way by which the government tries to deal with the problem of inadequate information that financial firms about their customers.
The interest rate effect suggests that
A) an increase in the price level decreases the interest rate, which causes businesses and consumers to reduce desired spending. B) an increase in the price level increases the interest rate, which causes businesses and consumers to reduce desired spending. C) an increase in the price level increases the money supply, which causes businesses and consumers to increase desired spending. D) a decrease in the price level decreases the interest rate, which causes businesses and consumers to reduce desired spending.