Why might a favorable change in the economy, such as technological improvement or a decrease in the price of imported oil, be associated with an increase in frictional unemployment?
Even generally favorable changes will usually involve some sort of sectoral shock that changes the demand for labor among different firms. For example, a decrease in the price of imported oil would likely reduce the demand for U.S. oil workers and increase the demand for automobile workers. Similarly, technological progress makes some industries decline and others advance, creating frictional unemployment.
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If an economy is at the short-run equilibrium illustrated by the figure above, a discretionary fiscal policy to adjust the economy to full employment is to
A) increase the quantity of money. B) decrease taxes. C) increase government spending. D) increase taxes and decrease government spending simultaneously. E) decrease the quantity of money.
The most important function of middlemen is to
A) act as marketing agents for producers. B) expand the number of jobs in the economy. C) produce valuable information and lower transaction costs. D) protect consumers from exploitation. E) stand between buyers and sellers to control markups.
In the simple linear regression model Yi = ?0 + ?1Xi + ui,
A) the intercept is typically small and unimportant. B) ?0 + ?1Xi represents the population regression function. C) the absolute value of the slope is typically between 0 and 1. D) ?0 + ?1Xi represents the sample regression function.
Mutual funds are a type of financial intermediary
a. True b. False Indicate whether the statement is true or false