Once supply side effects are taken into account, tax cuts for labor income can change
i. the supply of labor.
ii. potential GDP.
iii. the growth rate of potential GDP.
A) iii only B) ii only C) i only D) i and ii E) i and iii
D
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When a market has barriers to entry,
A) then in the long run it is possible for the firms to incur economic losses. B) then in the long run the only possible outcome for the firms is zero economic profit. C) then in the long run it might be possible for the firms to make economic profits. D) oligopolies cannot be created. E) the HHI almost always falls below 1,000.
When the actual unemployment rate is likely to exceed the natural rate of unemployment, as in the time intervals between t1 and t2 and t3 and t4 in Figure 1-1 above, we can expect that
A) inflation is speeding up and real GDP is likely to exceed natural GDP. B) inflation is slowing down and real GDP is likely to fall below natural GDP. C) inflation is speeding up and natural GDP is likely to exceed real GDP. D) inflation is slowing down and real GDP is likely to exceed natural GDP.
Adopting a uniform menu across all sites provides the McDonald's Corporation __________ by spreading the cost of menu development over a large output
a. economies of scale b. diminishing returns c. constant returns to scale d. rising marginal product e. more flexibility
A statement that is often used to describe demand-pull inflation is:
A. "A rising tide lifts all boats" B. "Money is easily earned, but not easily saved" C. "Too much money chasing too few goods" D. "There is no such thing as a free lunch"