There are not enough of four goods to satisfy the wants of people. For good A, this is true when the price is $100. This is true for good B at a price of $10, for good C at a price of $1, and for good D at a price of zero. Which situation reflects scarcity rather than shortage?
A. A
B. B
C. C
D. D
Answer: D
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Suppose job search has decreased over the last several years. This decrease could be a result of
i. a change in unemployment benefits. ii. a positive structural change. iii. a higher inflation rate. A) i only B) ii only C) i and iii D) i and ii E) ii and iii
Volatility clustering
A) is evident in most cross-sections. B) implies that a series is serially correlated. C) can mostly be found in studies of the labor market. D) is evident in many financial time series.
According to the Austrian view of the business cycle, if expansionary monetary policy pushes the interest rate to an artificially low level, the result will be
a. a long-term increase in output and employment. b. malinvestment and an unsustainable economic boom, followed by a recession. c. an increase in demand stimulus, that will expand employment and lead to a rapid increase in long-term economic growth. d. a temporary increase in the inflation rate, followed by a sustainable expansion in output and employment.
Suppose that the MPC is 0.7, there is no investment accelerator, and there are no crowding-out effects. If government expenditures increase by $30 billion, then aggregate demand
a. shifts rightward by $100 billion. b. shifts rightward by $51 billion. c. shifts rightward by $170 billion. d. shifts rightward by $72.8 billion.