The benefit to employers of deferred payments is that
A) adverse selection is eliminated.
B) employers cannot engage in any opportunistic behavior.
C) these payments raise the cost of being fired, so more monitoring is needed.
D) these payments raise the cost of being fired, so less monitoring is needed.
D
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Forecasts based on the extrapolation of observed trends and relationships are likely to be accurate, if ________
A) changes in expectations are properly considered B) policy actions are anticipated C) economic behavior is guided by rational expectations D) policy changes are understood to be permanent
A normal good is defined as a product for which quantity demanded increases as price decreases
a. True b. False
Assume the following situation. In year 1, a $400 capital stock generates a $100 GDP. One-fifth, or $20 of the $100 GDP, is put into investment. Assuming a constant capital/output ratio and no depreciation, the potential rate of GDP growth for this simple economy is
a. no growth b. 2 percent c. 5 percent d. 10 percent e. 20 percent
Many things that society values, such as good health, high-quality education, enjoyable recreation opportunities, and desirable moral attributes of the population, are not measured as part of GDP. It follows that
a. GDP is not a useful measure of society's welfare. b. GDP is still a useful measure of society's welfare because providing these other attributes is the responsibility of government. c. GDP is still a useful measure of society's welfare because it measures a nation's ability to purchase the inputs that can be used to help produce the things that contribute to welfare. d. GDP is still the best measure of society's welfare because these other values cannot actually be measured.