According to Okun's law, if output grew 7% and full-employment output rose 5%, what would be the change in the unemployment rate?
A. -1 percentage point
B. 1 percentage point
C. 4 percentage points
D. -4 percentage points
Answer: A
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If the percentage change in the quantity demanded of a good is greater than the percentage change in the price of the good, then the demand for the good is _____
a. inelastic b. relatively elastic c. unit-elastic d. perfectly inelastic e. income elastic
In the Keynesian model, when is the economy in short-run equilibrium?
a. when there is no inflation b. when there is full employment c. when there is a balanced federal budget d. when total spending (demand) is equal to production (supply)
The market tends to underproduce public goods because
A. The free-rider dilemma results in exclusive consumption of a good. B. The consumption of a public good by one person prevents the consumption of the same good by another person. C. Joint consumption allows those who do not pay for the good to still benefit from the good. D. It is difficult to measure the benefit of a public good such as national defense.
The percentage markups which sellers use
A) are based on their estimates or guesses about marginal cost and marginal revenue for particular goods. B) are between 10 and 15 percent. C) are the same on all products of a single firm. D) differ between products but are the same on average for all firms.