A high unemployment rate most likely means that there is a:
a. Large GDP gap in the economy
b. High rate of inflation in the economy
c. Low rate of interest in the economy
d. Small GDP gap in the economy
a. Large GDP gap in the economy
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The self-correcting property of the economy means that output gaps are eventually eliminated by:
A. increasing or decreasing potential output. B. government policy. C. decreasing inflation only. D. increasing or decreasing inflation.
Cyclical unemployment results from
A. technological change. B. the decreasing relative importance of goods and the increasing relative importance of services in the U.S. economy. C. a deficiency of spending on goods and services. D. the everyday dynamics of a free labor market, with workers voluntarily changing jobs.
Assume that a profit maximizing monopolist is producing a quantity such that marginal revenue exceeds marginal cost. We can conclude that the
A) firm is maximizing profit. B) firm's output is smaller than the profit maximizing quantity. C) firm's output is larger than the profit maximizing quantity. D) firm's output does not maximize profit, but we cannot conclude whether the output is too large or too small.
The average percentage markup in the economy is
a. relatively stable, but the price level may not be b. relatively stable, causing the price level to also be relatively stable c. relatively unstable, despite which the price level remains relatively stable d. relatively unstable, causing the price level to also be relatively unstable e. determined by the unit costs of production