Workers at a car-manufacturing plant are replaced by automated machinery. What type of unemployment best describes the workers' situation?
A. Structural unemployment
B. Full unemployment
C. Frictional unemployment
D. Cyclical unemployment
Answer: A
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During a recession, unemployment compensation payments increase without the need for any government action. This increase is an example of
A) discretionary monetary policy. B) automatic monetary policy. C) automatic fiscal policy. D) discretionary fiscal policy. E) government expenditure, but it is not an example of either discretionary or automatic policy.
By itself, the substitution effect of an increase in the wage rate will
a. always lead to an increase in the quantity of labor supplied b. always lead to a decrease in the quantity of labor supplied c. lead to an increase in the quantity of labor supplied only if leisure is like a normal good d. lead to an increase in the quantity of labor supplied only if leisure is not a normal good e. lead to an increase in the quantity of labor supplied only if the income effect works in the same direction
Average-cost pricing for a natural monopoly will: a. result in the socially efficient level of output
b. result in a less than socially efficient level of output. c. result in a greater than socially efficient level of output. d. result in the firm suffering economic losses.
Suppose that Venezuela experiences significant capital outflows after a recent election. If the nation had flexible exchange rates, these flows would have had the following effect on the nation's financial account and reserves account
a. Financial account would rise and reserves account would fall. b. Financial account would not change and reserves account would fall. c. Financial account would fall and reserves account would not change. d. Financial account would fall and reserves account would fall. e. Financial account would fall and reserves account would rise.