Assuming an upward-sloping AS curve, if an economy is at full employment and investment spending decreases while all other levels of spending remaining constant, then
A. A GDP gap emerges.
B. Output increases.
C. The price level increases.
D. The unemployment rate falls.
Answer: A
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To say that a firm is competitive in the labor market is to say that the firm can choose
a. both the wage it pays its workers and the number of workers it hires. b. neither the wage it pays its workers nor the number of workers it hires. c. the wage it pays its workers, but it cannot choose how many workers to hire. d. the number of workers it hires, but it cannot choose the wage it pays its workers.
The official U.S. poverty standard was set in 1963 at $3,000 per year for a family of four.
Answer the following statement true (T) or false (F)
Using Figure 1 above, if the aggregate demand curve shifts from AD2 to AD1 the result in the long run would be:
A. P4 and Y1. B. P4 and Y2. C. P5 and Y1. D. P5 and Y2.
Since 1970, the evidence for the U.S. suggests that the average rate of unemployment required to keep inflation constant has been
A) between 1% and 2%. B) between 2% and 3%. C) between 3% and 4%. D) between 9% and 10%. E) none of the above