According to the classical model, if there are too many elementary school teachers in the labor market,
a. the government should institute a retraining program to give the unemployed teachers new job skills
b. the wages for elementary teachers will fall, eventually causing the number of excess teachers to shrink
c. the wage for elementary teachers will increase for those who are employed, but unemployment of teachers will remain high
d. this situation provides an example of cyclical unemployment, which often occurs in the long run
e. people will quit training to become elementary school teachers and soon there will be a shortage in this labor market
B
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A major purchaser of corporate bonds is
A) state and local governments. B) money market mutual funds. C) pension and retirement funds. D) the Federal Reserve.
When the supply of labor to a firm is perfectly elastic the marginal factor cost will equal the
A) market price of the product. B) wage rate. C) marginal physical product. D) wage rate times the number of workers.
If aggregate output is falling, _____
a. federal budget deficit decreases b. tax revenue increases c. automatic stabilizers will tend to increase the size of the deficit d. automatic stabilizers will tend to decrease the size of the deficit e. transfer payments decrease as fewer people become eligible for public assistance
When a firm's average cost curve lies below its average revenue curve at the profit-maximizing level of output, it implies that the firm is suffering losses
a. True b. False Indicate whether the statement is true or false