Why is a recession's end sometimes not announced for long periods after the recession ends?
a. Because economic data is seldom accurate.
b. Because seasonal fluctuations and random disturbances make the economy difficult to track the differences between a temporary drop and a beginning of a downturn.
c. Because people don't change their behavior even when the economy is in a downturn.
d. No one knows why economists have a difficult time identifying the beginning and end of an economic downturn.
b
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A point lying inside (under) a production possibilities curve indicates that
a. the economy is saving money. b. there are no associated opportunity costs. c. more output could be produced with existing resources. d. technology limits production.
The number of persons who could become lawyers or surgeons is potentially quite large, yet these two groups earn fairly high incomes. One of the main reasons why they do is the
a. return on the investment of many years of training. b. evening-out of their low income during schooling. c. rent on their unique and rare talents. d. scarcity value of their abilities.
Explain whether or not the ability-to-pay principle of tax equity is consistent with the benefits received principle of taxation.
What will be an ideal response?
The behavior of the Solow residual suggests that when current total factor productivity increases
A) it becomes more difficult to predict future total factor productivity. B) future total factor productivity is also likely to increase. C) such increases are temporary, so we can draw no conclusions about the likely behavior of future total factor productivity. D) future total factor productivity is likely to decrease.