In the early 2000s, Chinese officials indicted members of a forgery syndicate that sold several hundred diplomas to high school graduates who needed the diplomas to take employment tests. This situation, where having the certificate of knowledge is more important than the knowledge itself, is known as:
A. the brain drain.
B. human capital.
C. certification.
D. credentialism.
Answer: D
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A consumer is in equilibrium, that is, a consumer is maximizing her utility when marginal utility and price are equal for each of the goods the consumer purchases
Indicate whether the statement is true or false
The default risk premium is measured
A) by an index published monthly by the Securities and Exchange Commission. B) by an index published monthly by The Wall Street Journal. C) as the difference between the yield on a non-Treasury security and the yield on a U.S. Treasury security of the same maturity. D) as the difference between the nominal yield on the security and the real after-tax yield on the security.
An information product is a product for which
A) the first item is produced inexpensively but additional units are more costly to produce. B) the first unit is very costly to make but additional units are less costly to produce. C) the marginal cost first falls and then rises but the average total cost rises throughout its range. D) the average fixed cost first falls and then rises, but the average total cost falls throughout its range.
Answer the following statement(s) true (T) or false (F)
1. The Phillips curve demonstrates a positive relationship between inflation and unemployment rates. 2. Lower real wages make it more profitable for companies to hire additional employees. 3. The relationship demonstrated by the Phillips curve tends to disappear in the long run. 4. As aggregate demand in an economy increases, it moves up and to the left on its Phillips curve. 5. The AD/AS model and the Phillips curve show two completely different and unrelated economic events.