In many large retail stores, price markdowns are now determined by computer. The "middle managers" who used to make these decisions personally became __________ unemployed
A) frictionally
B) structurally
C) naturally
D) cyclically
B
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Starting from long-run equilibrium, an increase in autonomous investment results in ________ output in the short run and ________ output in the long run.
A. lower; potential B. higher; higher C. lower; higher D. higher; potential
Two firms would sometimes be better off if they got together and agreed to charge a high price, rather than to compete and risk having to charge a lower, competitive price. What is the greatest deterrent to this strategy?
A) One of the firms may decide to lower its price and take business away from the firm that charged the high price. B) The firms may find that the price they charge is greater than the price that would maximize their profits. C) An agreement by firms to charge high prices is illegal. The government can fine the firms and send their managers to jail. D) Consumers may resent having to pay high prices and not buy from either of the firms.
If the Federal Reserve attempts to continue reducing unemployment by manipulating monetary policy, which of the following would you expect to see?
A) The rate of inflation will fall as the Fed tries to reduce the unemployment rate. B) The Fed's policies will be deflationary. C) The Fed's policies will be inflationary. D) The Fed will reduce the natural rate of unemployment.
The probit model
A) is the same as the logit model. B) always gives the same fit for the predicted values as the linear probability model for values between 0.1 and 0.9. C) forces the predicted values to lie between 0 and 1. D) should not be used since it is too complicated.