The assumption of rationality implies that market participants:
a. always choose the option with the highest gross benefit.
b. assess expected benefits and expected costs.
c. do not make decisions under uncertainty.
d. do not care about benefits or costs accruing in the future.
Ans: b. assess expected benefits and expected costs.
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If a budget is cyclically balanced, the government should run a surplus when the economy experiences a contractionary gap
a. True b. False Indicate whether the statement is true or false
The unemployment rate is the percentage of:
a. the total adult population without jobs. b. adults who are in the labor force but who do not have jobs. c. the total adult population that are not working full-time jobs. d. the population without jobs.
Which of the following unemployment types is the major concern of macroeconomics?
a. Frictional unemployment b. Seasonal unemployment. c. Underemployment d. Structural unemployment e. Cyclical unemployment.
Research involving industrially advanced countries suggests that:
A. the more independent the central bank, the lower the average annual growth of real GDP. B. the more independent the central bank, the higher the average annual growth of real GDP. C. there is no relationship between the degree of independence of a country's central bank and the growth rate of its real GDP. D. the less independent the central bank, the higher the average annual rate of inflation.