Frictional unemployment
A. refers to unemployment caused by friction between labor and management.
B. stems mainly from the fact that the economy is continually changing and people are changing jobs.
C. refers mainly to unemployment resulting from natural disaster.
D. is undesirable and therefore should be eradicated.
B. stems mainly from the fact that the economy is continually changing and people are changing jobs.
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Exhibit 17-3 Aggregate demand and aggregate supply curves
As shown in Exhibit 17-3, if people behave according to adaptive expectations theory, an increase in the aggregate demand curve from AD1 to AD2 will cause the price level to move:
A. from 100 to 110 initially and then eventually move back to 100. B. directly from 100 to 110 and then remain at 110. C. directly from 100 to 120 and then remain at 120. D. from 100 to 110 initially and then eventually move to 120.
The economy pictured in the figure has a(n) ________ gap with a short-run equilibrium combination of inflation and output indicated by point ________. 
A. recessionary; A B. recessionary; C C. recessionary; B D. expansionary; A
Agency problems and costs are incurred whenever the owners of a firm delegate decision-making authority to management
a. true b. false
Money serves as a store of value, which means:
a. it acts as an intermediary between the buyer and the seller. b. it will still hold its value. c. it is the ruler by which other values are measured. d. it must also be acceptable to make purchases today that will be paid in the future.