The size of the underground economy is probably large when:
A. taxes are low.
B. the cost of doing business legally is low.
C. bribes are often necessary to cut through bureaucratic red tape.
D. All of these statements are true.
Answer: C
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The labor force is the sum of the
A) working-age population and the number of unemployed people. B) number of employed people and the working-age population. C) number of employed people and the number of unemployed people. D) total population and the number of unemployed people.
Which of the following has made the greatest contribution to economic growth over time?
A. Research and development. B. Improved human capital. C. Improved management techniques. D. Higher ratios of capital to labor.
(Consider This) During and immediately following the severe recession of 2007-2009, on the consolidated balance sheet of the 12 Federal Reserve Banks:
A. commercial bank reserves grew significantly because the Fed increased the required reserve ratio. B. liabilities fell significantly as commercial banks drained reserve accounts to meet their own deposit liabilities. C. assets fell significantly as a result of heavy withdrawals from commercial banks. D. assets grew significantly from Fed purchases of securities from financial institutions.
In new classical economics, the change in output caused by a "price-level surprise":
A. is shown as a shift of the long-run aggregate supply curve. B. does not alter the rate of unemployment, even in the short run. C. is soon reversed through a shift of the short-run aggregate supply curve. D. permanently changes the rate of unemployment.