Welfare reforms enacted in 1996 put more pressure on welfare recipients to look for work. The new law mandated cutting off benefits after a certain length of time. Which of the following is likely to occur as a result of this provision?
A. the natural rate of unemployment and the unemployment rate are likely to increase.
B. the natural rate of unemployment is likely to decrease, but the unemployment rate is likely to increase.
C. the natural rate of unemployment is not affected, but the unemployment rate is likely to increase.
D. the natural rate of unemployment is not affected, but the unemployment rate is likely to fall.
Ans: A. the natural rate of unemployment and the unemployment rate are likely to increase.
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During 2008, oil price increases
A) did not shift the short-run aggregate supply curve as far to the left as similar increases had 30 years earlier. B) shifted the short-run aggregate supply curve farther to the left than similar increases had 30 years earlier. C) shifted the aggregate demand curve farther to the left than similar increases had 30 years earlier. D) shifted the aggregate demand curve farther to the right than similar increases had 30 years earlier.
According to the gravity model, a characteristic that tends to affect the probability of trade existing between any two countries is
A) their cultural affinity. B) the average weight/value of their traded goods. C) their colonial-historical ties. D) the distance between them. E) the number of different product varieties produced by their industries.
All of the following are true for the leader firm in a Stackelberg oligopoly with a linear demand and marginal cost except which one?
A) The leader earns more profit than the follower second firm. B) The leader earns more profit than if it operated in a Chamberlin oligopoly. C) The leader has first-mover advantage. D) The leader takes the follower second firm's best-response production into consideration when determining its output level.
Partially-flexible exchange rates:
A. produce fewer exchange rate changes in general than fixed exchange rates. B. provide governments with a more independent monetary policy than flexible exchange rates. C. mix market forces with government intervention in a way that permits the exchange rate to respond to long-term balance of payments problems. D. mix market forces with government intervention in a way that allows exchange rates to respond to speculative pressures.