Suppose that airline workers are laid off during a recession because of an unspoken agreement between airline workers and airline executives that wages will not be reduced. This example is consistent with the
A. implicit contract explanation of unemployment.
B. explicit contract explanation of unemployment.
C. efficiency wage explanation of unemployment.
D. relative-wage explanation of unemployment.
Answer: A
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Describe each of the principles governments consider when deciding which taxes to use
What will be an ideal response?
The natural rate of interest is the rate
A) which equates saving and investment under any employment condition. B) which equates saving and investment with acceptable, but low, unemployment. C) which equates saving and investment at an unemployment rate of 5 percent or less. D) which equates saving and investment at full employment.
The stand-alone selling price of a good or service may be highly uncertain because the seller
A. has not previously sold the good or service. B. sells the product or service in various combinations with other goods or services. C. provides the same good or service to different customers at substantially different prices
The national debt
A) is the sum of all past federal deficits plus any surpluses. B) grows when the government runs a deficit. C) grows when government spending increases. D) is a major problem facing the U.S. government.