Before the South Korean financial crisis, sales by the top five chaebols (family-owned conglomerates) were
A) nearly 50% of GDP.
B) about 10% of GDP.
C) almost 90% of GDP.
D) nearly 25% of GDP.
A
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Moving along the potential GDP line, the money wage rate changes by the same percentage as the change in the price level so that the real wage rate
A) stays at the full-employment equilibrium level. B) increases. C) might either increase or decrease. D) decreases. E) stays the same, though not necessarily at the full-employment equilibrium level.
The idea that paying higher wages attracts a more talented labor pool is called the
a. winner's curse b. efficiency wage theory c. marginal productivity theory d. lemons problem e. theory of the second best
If economists are making the assumption that business people try to maximize profits, the best way to determine whether this assumption is useful or not is to
A) see whether it generates accurate predictions about the choices of business people. B) ask business people whether it is true or not. C) find out whether U.S. businesses are more profitable than European businesses. D) take a survey of people and see if they agree with this assumption.
Sellers respond to a surplus by cutting their prices
a. True b. False Indicate whether the statement is true or false