Which of the following is most likely to shift the potential output of an economy to the right?
a. A decline in the length of the average workweek
b. An increase in the supply of educated and skilled workers
c. A drought
d. An increase in aggregate demand
e. An increase in the minimum wage received by workers
b
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The dominant school of thought prior to the 1930s was known as the:
a. Keynesian school. b. classical school. c. rational expectations school. d. supply-side school. e. monetarist school.
The economy of Alpha operates according to Okun's law. In Alpha, potential GDP equals $500 billion, actual GDP equals $480 billion, and the natural rate of unemployment is 5 percent. What is the actual rate of unemployment in Alpha?
A. 3 percent B. 7 percent C. 1 percent D. 4 percent
In which of the following instances is the effect on equilibrium price dependent on the magnitude of the shifts in supply and demand?
A. Demand rises and supply rises. B. Supply falls and demand remains constant. C. Demand rises and supply falls. D. Supply rises and demand falls.
An indifference curve between one dozen eggs and several dozens of eggs would be
A. bowed in to the origin. B. a downward sloping straight line. C. bowed out from the origin. D. a straight line from the origin.