Suppose the natural rate of unemployment is 5 percent. If the actual unemployment rate is 4 percent, then the cyclical unemployment rate is
A. 1 percent.
B. -1 percent.
C. 9 percent.
D. 0 percent as cyclical unemployment cannot be less than zero.
Answer: B
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How does economies of scale improve second-degree price discrimination?
A. Firms have increasing opportunity costs and therefore must sell more goods at higher prices to make up the extra costs. B. ATC decreases and then increases which affects the cost to firms. C. People have increasing marginal benefit as ATC decreases. D. ATC decreases as output increases which allows a firm to charge lower prices at different output levels.
A Prisoners Dilemma illustrates the fact that
a. Rational choices can lead to inefficient outcomes
b. Rational choices always leads to good outcomes
c. Rational choices always lead to inefficient outcomes
d. None of the above
During an expansion, how do inflation and unemployment typically change?
A) Inflation and unemployment both fall. B) Inflation falls and unemployment rises. C) Inflation and unemployment both rise. D) Inflation rises and unemployment falls.
Once either expansionary or contractionary fiscal policy has been undertaken,
A) aggregate demand will respond quickly and the problems in the economy will be corrected. B) aggregate demand will respond quickly in the short run but the economy will not improve in the long-run. C) a time lag exists between implementation and the results of the policy. D) taxes will need to be adjusted because of the recognition time lag.