In using the composite-good convention in an indifference curve diagram, economists
a. compare the prices of market baskets at different points in time.
b. divide the world's production into two classes, goods and services.
c. divide the world's goods into two classes, high quality goods and low quality goods.
d. lump together all goods but one into a single good measured in a single unit, like dollars.
d. lump together all goods but one into a single good measured in a single unit, like dollars.
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If the amount paid as unemployment benefits decreases, the opportunity cost of job search
A) falls and people stay unemployed for a shorter time. B) rises and people would stay unemployed longer. C) rises and people stay unemployed for a shorter time. D) falls and people stay unemployed for a longer time. E) is not affected because unemployment benefits do not change job availability.
When a production function is graphed with Real GDP on the vertical axis and labor on the horizontal axis, a rise in labor ________________________which shifts the LRAS curve ____________ resulting in ______________________
A) shifts the production function up; rightward; economic growth B) shifts the production function down; leftward; a shrinking economy C) moves us up along a given production function; rightward; economic growth D) moves us down along a given production function; leftward; a shrinking economy
The Gini coefficient provides a measure of
a. the level of poverty. b. the level of relative inequality. c. disguised unemployment. d. the rate of growth.
Suppose investment spending is not very sensitive to the interest rate. Given this information, we know that
A) the IS curve should be relatively flat. B) the IS curve should be relatively steep. C) the LM curve should be relatively flat. D) the LM curve should be relatively steep. E) neither the IS nor the LM curve will be affected.