The index of leading indicators is a factor that
A. Generally moves in a positive direction before recessions.
B. Is a mathematical summary of the economy's past performance.
C. Is published weekly and provides forecasts of the economy three to six months in advance.
D. We can observe today that is logically linked to future economic performance.
Answer: D
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The "lemons problem" exists because of
A) transactions costs. B) economies of scale. C) rational expectations. D) asymmetric information.
Poverty is most likely to decrease in which of the following situations:
A. The size of the labor force decreases. B. Population grows more rapidly than GDP. C. The population decreases and GDP stays constant. D. Population and the economic growth rate both decrease.
A partnership is a business:
A. that has only one owner. B. legally treated as a person and owned by stockholders who are not liable for the actions of the corporate "person." C. in which each owner is liable only to the extent of his or her own investment. D. with two or more owners, with each owner liable for every other owner's actions.
Related to the Economics in Practice on p. 105: Researchers found that a ten percent reduction in the tax rate induced a twenty percent increase in migration in Europe. This indicates that labor migration in Europe is
A. elastic. B. unit elastic. C. inelastic. D. perfectly inelastic