Which of the following shifts, ceteris paribus, will cause lower rates of both unemployment and inflation?
A. A decrease in aggregate supply.
B. An increase in aggregate supply.
C. A decrease in aggregate demand.
D. An increase in aggregate demand.
Answer: B
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Economists assume that most individuals act as if they are motivated by self-interest and respond in predictable ways to changing circumstances
a. True b. False Indicate whether the statement is true or false
Which statement is true?
A. On the production possibilities frontier, unemployment is zero percent. B. On the production possibilities frontier, 85 percent of the labor force is employed. C. To get out of a recession, we must move to some point closer to the production possibilities frontier. D. To have economic growth, we must have zero unemployment.
Refer to Figure 6.3. On this graph, area ACD is:
A. producer surplus. B. total surplus. C. consumer net benefit. D. consumer surplus.
One reason earnings tend to fall before retirement age is that
A. people are retiring earlier. B. firms discriminate against older workers. C. people tend to reduce the number of hours they work after age 50. D. the experience of people is no longer valuable after they are 50 or 55.