If the economy is operating at full employment, then
A) the unemployment rate is zero.
B) everyone who wants a job has one.
C) the entire labour force is employed.
D) the unemployment rate is approximately 3 percent.
E) none of the above.
E) none of the above.
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Suppose transactions costs are created by a principal-agent problem. If the objective is economic efficiency, who should be made liable for damages resulting from the interaction of the principal and the agent?
a. The principal should be liable for all damages. b. The agent should be liable for all damages. c. Liability for damages should be equally split between the principal and the agent. d. The assignment of liability is irrelevant according to the Coase Theorem.
The goal of the firm is
A) low labor turnover. B) to maximize sales. C) to minimize costs. D) profit maximization.
Long distance telephone service has become a competitive market. The average cost per call is $0.05 a minute, and it's declining. The likely reason for the declining price for long distance service is:
a. Governmental pressure to lower the price b. Reduced demand for long distance service c. Entry into this industry pushes prices down d. Lower price for a barrel of crude oil e. Increased cost of providing long distance service
Which of the following is not one of the four principles of individual decision making?
a. People face trade-offs. b. Trade can make everyone better off. c. People respond to incentives. d. Rational people think at the margin.