Okun's Law has
A. proven to be correct over time in that as GDP increases by 3%, there has been a 1 percentage point decline in unemployment.
B. not turned out to be a law-the relationship between changes in GDP and the unemployment rate is more complex than Okun's Law indicates.
C. been proven false, because there is a positive relationship between changes in GDP and the unemployment rate.
D. been proven to be completely incorrect-there isn't a negative relationship between GDP and the unemployment rate.
Answer: B
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Minimum-wage legislation is less likely to have adverse effects on employment when the:
A. affected labor market is monopsonistic. B. economy has high unemployment. C. derived demand for labor is shifting to the left. D. affected labor market is perfectly competitive.
The purchase by a foreign government of an airplane produced in the United States is included in U.S
A) consumption expenditures. B) investment expenditures. C) government purchases. D) net exports.
The group of people who are willing to offer money in exchange for goods and services is called
A. consumers. B. producers. C. benefactors. D. profiteers.
As a result of a shortage,
A. Producers reduce supply. B. Producers increase output and raise price. C. Government purchases decrease. D. Consumers increase demand for the product.