The unemployment rate does not tend to fall as soon as the economy pulls out of a recession. Which of the following best explains this?
A. During recessionary periods, firms switch to more capital-intensive production techniques, so they do not need to increase employment as the economy pulls out of the recession.
B. Firms are holding excess labor, so as the economy pulls out of the recession, firms do not need to hire new workers immediately.
C. Firms' optimism about the state of the economy increased prior to the economy pulling out of the recession, so firms increased their employment earlier.
D. Firms are not able to find qualified workers to fill the job vacancies.
Answer: B
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When the economy is in long-run equilibrium, there will be
A) no unemployment. B) cyclical unemployment only. C) frictional and structural unemployment. D) cyclical and seasonal unemployment.
By the 20th century, the largest sector of the U.S. economy in terms of commodity output value was
a. agriculture. b. manufacturing. c. mining. d. construction.
If good A has a marginal utility of 30 and a price of $5, and good B has a marginal utility of 10 and a price of $2, then:
a. good A is a better buy than good B. b. good B is a better buy than good A. c. goods A and B are of equal value to this consumer. d. neither good A nor B is worth the money. e. goods A and B should both be purchased.
Louise Bakery sells cupcakes that have an equilibrium price of $5.00 per cupcake and an equilibrium output of 300 cupcakes. Which of the following is likely to be true when the government imposes a tax of $0.75 per cupcake? a. Producer and consumer surplus will increase. b. Producer and consumer surplus will decline. c. Equilibrium price will decrease
d. Equilibrium output will increase.