Which of the following is true about the natural rate of unemployment?
(a) It can vary over time.
(b) It is one percent or less of the population.
(c) It is equal to the structural unemployment rate.
(d) It reflects only frictional unemployment.
Answer: (a) It can vary over time.
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The wealth effect points out that consumption decreases when people's real wealth decreases
Indicate whether the statement is true or false
Refer to Figure 15-8. Use the figure above to answer the following questions
a. Identify the curves labeled A and B. Identify the curve which contains both point Y and point Z. Identify the curve which contains both point V and point W. b. What is the profit-maximizing quantity and what price will the monopolist charge? c. What area represents total revenue at the profit-maximizing output level? d. What area represents total cost at the profit-maximizing output level? e. What area represents profit? f. What is the profit per unit (average profit) at the profit-maximizing output level? g. If this industry was organized as a perfectly competitive industry, what would be the profit-maximizing price and quantity? h. What area represents the deadweight loss as a result of a monopoly?
When the actual unemployment rate is likely to exceed the natural rate of unemployment, as in the time intervals between t1 and t2 and t3 and t4 in Figure 1-1 above, we can expect that
A) inflation is speeding up and real GDP is likely to exceed natural GDP. B) inflation is slowing down and real GDP is likely to fall below natural GDP. C) inflation is speeding up and natural GDP is likely to exceed real GDP. D) inflation is slowing down and real GDP is likely to exceed natural GDP.
The graph that represents the amount of deadweight loss (measured on the vertical axis) as a function of the size of the tax (measured on the horizontal axis) looks like
a. a U. b. an upside-down U. c. a horizontal straight line. d. an upward-sloping curve.