Suppose that unemployment increases because the government requires employers to provide more funds for their employees' retirement programs. The increase in unemployment is most likely a result of an increase in
A. frictional unemployment.
B. structural unemployment.
C. cyclical unemployment.
D. the natural rate of unemployment.
Answer: B
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Refer to Figure 18-1. Suppose that the U.S. government deficit causes interest rates in the United States to rise relative to those in the European Union. Assuming all else remains constant, how would this be represented?
A) Supply would decrease, demand would decrease and the economy moves from B to C to D. B) Supply would increase, demand would decrease and the economy moves from C to B to A. C) Demand would decrease and the economy moves from B to A. D) Demand would increase and the economy moves from A to B.
Between September 2009 and September 2010, the recovery of private inventories, as shown in Figure 19.1, was far stronger than the overall economy's recovery from the Great Recession. Which is the most reasonable inference?
A) Persistently weak aggregate demand gave producers no alternative but to place current output into storage. B) Businesses overestimated the strength of the recovery, which lead to overstocking of inventories. C) Financial constraints had forced businesses to contract inventories by more than they otherwise would have chosen. The period beginning in September 2009 reflects the attempt by businesses to correct this. D) Generally poor weather conditions in the final months of the year in the northern hemisphere make it less costly to store goods than to transport them to consumers.
The value of a dollar varies
A) inversely with the price of gold. B) inversely with the price level. C) directly with the price level. D) directly with the purchasing power of other major currencies.
The problem of _____ can arise when a seller cannot obtain reliable information from buyers
a. moral hazard b. adverse selection c. lemons problem d. incomplete information