Suppose that some people report themselves as unemployed when, in fact, they are working in the underground economy. If these persons were counted as employed, then
a. both the unemployment rate and labor-force participation rate would be higher.
b. both the unemployment rate and labor-force participation rate would be lower.
c. the unemployment rate would be higher, and the labor-force participation rate would be higher.
d. the unemployment rate would be lower, and the labor-force participation rate would be unaffected.
d
You might also like to view...
Empirical estimates indicate that the annual welfare cost of monopoly in the United States
a. ranges from less than 1 percent to 5 percent of national income b. ranges from 10 percent to 20 percent of national income c. is approximately 10 percent of national income d. is approximately $1 billion e. is approximately $1 trillion
Transactions accounts allow for direct payment to a third party.
Answer the following statement true (T) or false (F)
Suppose you negotiate a one-year loan with a principal of $1000 and the nominal interest rate is currently 7%. You expect the inflation rate to be 3% over the next year. When you repay the principal plus interest at the end of the year, the actual inflation rate is 2.5%. Compute the ex ante and ex post real interest rate. Who benefits from this unexpected decrease in inflation? Who loses?
What will be an ideal response?
The economic model of consumer behavior predicts that
A) consumers will try to earn as much income as they can over their lifetimes. B) consumers will choose to buy the combination of goods and services that make them as well off as possible from those combinations that their budgets allow them to buy. C) consumers will try to accumulate as many goods and services as they can before they die. D) consumers divide their time between consumption and leisure activities in order to maximize social welfare.