If people are made unemployed because of a fall in aggregate demand this is known as:
a) Frictional unemployment
b) Seasonal unemployment
c) Cyclical unemployment
d) Structural unemployment
Answer: c) Cyclical unemployment
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In 1973, mainstream sources predicted that the world would run out of oil in
A) 20 years. B) 40 years. C) 100 years. D) Mainstream sources in 1973 predicted the world would never run out of oil.
Which of the following is not a reason why firms experience economies of scale?
A) Workers and managers can become more specialized, enabling them to be more productive. B) As output increases, the managers can begin to have difficulty coordinating the operations of their firms. C) Technology can make it possible to increase production with a smaller increase in at least one input. D) Larger firms may be able to purchase inputs at lower costs than smaller competitors.
Suppose that the nominal rate of interest is holding steady at 8 percent even as the anticipated rate of inflation rises. What is happening to the real rate of interest?
A) It is unchanged. B) It is increasing. C) It is decreasing. D) It equals the nominal interest rate.
Using the production function Real GDP = T (L, K), and the LRAS curve, describe the process by which a decline in taxes on the returns to capital impacts economic growth