What is true of both expansions and recessions?
a. There is a poorer than normal match between workers and their jobs.
b. The labor market clears.
c. The economy operates at its potential output.
d. Cyclical unemployment is zero.
e. None of the above.
A
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In a market with ________, one side of the market has private information that is relevant for the other side
A) asymmetric information B) perfect competition C) monopolistic competition D) positive externalities
If the shifts in AD that will result from policy changes are fully and accurately anticipated, an increase in government purchases or a decrease in taxes would result in which of the following in the short run?
a. a higher level of real output and a higher price level b. a higher level of real output but no change in the price level c. a higher price level and a reduced level of real output d. a higher price level but no change in real output
Suppose a German bank purchases a U.S. Treasury bond. This transaction would be recorded in the:
a. unilateral transfers. b. current account. c. capital account. d. goods trade balance.
A firm operating in a perfectly competitive industry will continue to operate if it earns zero economic profits because it is likely to be earning positive accounting profits
a. True
b. False
Indicate whether the statement is true or false