Which of the following is FALSE concerning the long run?
A) Economists believe that fiscal and monetary policies have no permanent effects on the economy.
B) Economists more or less agree that the economy tends to fluctuate around the level that is consistent with full employment.
C) In the long run, the unemployment rate returns to its normal level.
D) The current account must tend toward balance in the long run.
E) None of the above.
E
You might also like to view...
The perfectly competitive firm has no influence over price because
A. its output is so insignificant relative to the market as a whole. B. antitrust laws constrain perfectly competitive firms. C. consumers establish the prices of products. D. it doesn’t know its demand curve.
Which of the following is one of the chief reasons for the increased number of married women in the U.S. work force?
a. The marginal cost of working in the labor force has increased. b. Jobs provide greater independence and self-worth. c. The opportunity cost of household work has increased. d. The sunk cost of household appliances has risen to the point that women must work to make payments on them. e. Women spend more time in the market as a result of the increasing division of labor in household production.
Suppose there are two types of people: "good risks" who have 1 to 9 odds of falling ill, and "bad risks" who have a 1 to 3 odds of falling ill. If an insurance company cannot distinguish good risks from bad risks, what is the best way for it to deal with this problem?
a. Do not offer any insurance at 1 to 3 odds. b. Make everyone purchase insurance that offers 1 to 3 odds. c. Limit the amount of insurance that can be purchased at 1 to 9 odds. d. Provide policies that offer 1 to 9 odds and 1 to 3 odds, allowing each group to purchase the appropriate policy.
Refer to the above diagram. A surplus of 160 units would be encountered if price was:
A. $.50. B. $1.10, that is, $1.60 minus $.50. C. $1.00. D. $1.60.