Under the classical model, workers and resources remain fully employed at the natural rate of real output following an aggregate demand change because ______.
a. downward wages and prices are sticky
b. inflationary gaps boost the potential output
c. prices, wages, and interest rates all adjust quickly
d. the economy quickly moves beyond its potential output
c. prices, wages, and interest rates all adjust quickly
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When the value of one currency falls relative to another currency, the exchange rate for the first currency has
A) depreciated. B) appreciated. C) demanded. D) revalued.
George is considering investing in a frozen yogurt store. If the store does well he will make $20,0000, but if the store does poorly he will make only $10,000. There is a 50 percent chance of each outcome
His utility of wealth schedule is in the above table. The expected utility of this investment is A) 115. B) 140. C) 165. D) 180.
State right-to-work laws
A) prohibit discrimination in hiring. B) force companies to submit to Equal Employment Opportunities Commission arbitration in disputes. C) encourage companies to hire minorities. D) make compulsory union membership illegal.
When macroeconomics refers to "full employment," what do they mean?
a. Full employment occurs when the unemployment rate equals zero. b. Full employment occurs when there is only frictional unemployment, and all other types of unemployment have been eliminated. c. Full employment occurs when there is only structural unemployment, and all other types of unemployment have been eliminated. d. Full employment occurs when there is only frictional unemployment, structural, and cyclical unemployment has been eliminated.