The natural real GDP will ________ following a rise in energy prices because
A) rise; labor productivity increases.
B) fall; labor productivity increases.
C) fall; real wages are flexible and employment is less attractive relative to leisure.
D) B and C are both correct.
C
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Politically, one reason trade restrictions are common is that
a. the many beneficiaries of free trade each gain a small amount whereas the few losers, lose enough to lobby for restrictions. b. the beneficiaries of free trade collectively gain a small amount whereas the few losers, collectively lose much more. c. the few beneficiaries of free trade each gain a large amount and the many losers, lose enough to lobby for restrictions. d. foreign corporations bribe politicians.
Until recently, George lived in a home that was newly constructed in 2005 . In 2005, he paid $200,000 for the brand new house. He sold the house in 2006 for $225,000 . Which of the following statements is correct regarding the sale of the house?
a. The 2006 sale increased 2006 GDP by $225,000 and had no effect on 2005 GDP. b. The 2006 sale increased 2006 GDP by $25,000 and had no effect on 2005 GDP. c. The 2006 sale increased 2006 GDP by $225,000; furthermore, the 2006 sale caused 2005 GDP to be revised upward by $25,000. d. The 2006 sale affected neither 2005 GDP nor 2006 GDP.
Team production is a limiting factor as a solution to incentive problems because:
A. some team members never get along. B. some team members may perceive the team leader to be a role model. C. some team members may choose to shirk and let the rest carry the load. D. the entire team may be inefficient.
Which of the following would be categorized as an unconventional monetary policy tool?
A. Targeted asset purchases B. Federal funds rate target range C. Deposit rate D. The interest rate on excess reserves (IOER)