Americans whose jobs have been lost to free trade should, in theory:
A. leave the workforce, in the long run.
B. be able to find new jobs, given time.
C. have extended bouts of unemployment due to static job skills.
D. gain surplus, as the income effect outweighs the price effect of their labor.
Answer: B
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Which of the following is NOT an assumption of the classical model?
A) Wages and prices are flexible. B) People are motivated by self-interest. C) Money illusion exists. D) Pure competition exists.
The view that well-organized producer groups expect to profit from economic regulation and therefore, persuade public officials to impose restrictions that existing producers find attractive is called?
a. social regulation b. public interest regulation c. special interest regulation d. anti-trust regulation
The main policy-making organ of the Federal Reserve System is
A) the Board of Governors. B) the Federal Reserve branch banks. C) the Federal Reserve chairman and the Federal Reserve branch bank presidents. D) the Federal Open Market Committee.
The housing market crash that accompanied the 2007-2009 recession has had severe negative effects on the U.S. economy. Since December 2008, the target federal funds rate has been 0.0-0.25%
Assuming the Fed keeps the real interest rate constant, a recovery in the housing market would cause the ________, and the output gap would ________. A) MP curve to shift up; become less negative B) MP curve to shift down; become more negative C) IS curve to shift to the left; become more negative D) IS curve to shift to the right; become less negative