The natural rate of unemployment
A. exists only during periods of recession or depression in the economy.
B. prevails in long-run macroeconomic equilibrium, when all workers and employers have fully adjusted to any changes in the economy.
C. prevails in the short-run macroeconomic equilibrium, before workers and employers have had a chance to adjust to an economic shock.
D. exists due to welfare and unemployment benefits that reduce potential workers' incentives to find work.
Answer: B
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The referendum version of the median voter model allows voters to vote on a series of marginally increasing quantities of a good
a. True b. False
If a country devotes its resources to acquiring more physical capital it will:
A. decrease its output per person. B. increase its productivity. C. increase its current consumption. D. All of these are true.
Which of the following explains why the original Phillips curve relation disappeared or, as some economists have remarked, "broke down" in the 1970s?
A) Individuals assumed the expected price level for the current year would be equal to the actual price level from the previous year. B) Individuals assumed that expected inflation would be zero C) Individuals changed the way they formed expectations of inflation. D) Monetary policy became contractionary. E) More labor contracts became indexed to changes in inflation.
U.S. exports of goods and services (on a national income account basis) are about:
A. 20 percent of U.S. GDP. B. 8 percent of U.S. GDP. C. 28 percent of U.S. GDP. D. 14 percent of U.S. GDP.