When the economy is in long-run equilibrium, there will be
A. cyclical unemployment only.
B. cyclical and seasonal unemployment.
C. no unemployment.
D. frictional and structural unemployment.
Answer: D
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In long-run equilibrium, a perfectly competitive firm will operate where price is
A. equal to MR, MC, and the minimum ATC. B. greater than MC and the minimum ATC, but equal to MR. C. greater than MR but equal to MC and the minimum ATC. D. greater than MR and MC, but equal to the minimum ATC.
One of the criticisms of Basel 2 is that it is procyclical. That means that
A) banks may be required to hold more capital during times when capital is short. B) banks may become professional at a cyclical response to economic conditions. C) banks may be required to hold less capital during times when capital is short. D) banks will not be required to hold capital during an expansion.
Normative statements are: a. prescriptive, making claims about how the world ought to be. b. descriptive, making claims about how the world is
c. optimistic, putting the best possible interpretation on things. d. statements that establish production goals for the economy.
Assume that the central bank increases the reserve requirement. If the nation has low mobility international capital markets and a flexible exchange rate system, what happens to the real risk-free interest rate and net nonreserve-related international borrowing/lending in the context of the Three-Sector-Model?
a. The real risk-free interest rate rises, and net nonreserve-related international borrowing/lending becomes more positive (or less negative). b. The real risk-free interest rate falls, and net nonreserve-related international borrowing/lending becomes more negative (or less positive). c. The real risk-free interest rate rises, and net nonreserve-related international borrowing/lending becomes more negative (or less positive). d. The real risk-free interest rate and net nonreserve-related international borrowing/lending remain the same. e. There is not enough information to determine what happens to these two macroeconomic variables.