One argument for cyclical unemployment is
a. high labor force participation.
b. a downturn in the economy.
c. sticky downward wages.
d. an upturn in the economy.
c. sticky downward wages.
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Which of the following are examples of involuntary risks?
a. skydiving d. (b) and (c) only b. mountain climbing e. none of the above c. being exposed to secondhand smoke
For a given production possibilities frontier, which points are attainable?
A. Points inside the frontier B. Points outside the frontier C. Points on or outside the frontier D. Points on the frontier only E. Points on or inside the frontier
Which of the following is an argument in favor of judging competitiveness by performance rather than structure?
A. Under the judgment by structure criterion, a firm may be breaking the law if it does what it's supposed to be doing: producing the best product it can at the lowest cost. B. Courts know little economic theory. C. Structure can be a predictor of future performance. D. Judgment by performance requires that each action of a firm be analyzed on a case-by-case basis, which is very time-consuming and expensive.
According to proponents of the interest-rate-based monetary policy transmission mechanism, any increase in the money supply
A. is effective in increasing Gross Domestic Product (GDP) only if it causes an outward shift of the aggregate supply curve. B. causes velocity to increase, and so in the short run nominal Gross Domestic Product (GDP) must increase. C. will increase Gross Domestic Product (GDP) only if interest rates fall and investment is sensitive to decreasing interest rates. D. will move the economy from the "liquidity trap" during times of recession if interest rates fall enough to stimulate private investment.