When the president says that "High inflation rates are a much more serious economic problem than high unemployment rates," it is an example of
A) a normative statement.
B) an empirically proven fact.
C) a positive statement.
D) an irrational argument.
A
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M2 is
A) smaller than M1. B) larger than M1. C) equal to M1, given full employment. D) equal to M1, but only when all three functions of money apply.
If market price is greater than or equal to the minimum of AVC but below the minimum of AC, then
A) the firm will shut down. B) the firm will operate because its loss is less than if it shut down. C) revenue is lower than variable costs. D) profit is positive and so the firm will operate.
During recessions, GDP falls and unemployment increases. Why might the actual output produced not fall as much as officially measured GDP during recessions?
a. There is an increase in involuntary part-time employment during recessions, the output from which is not accounted for in GDP b. Workers who became unemployed during the recession may produce goods in the underground economy c. Unemployment benefits to laid off workers are included in GDP d. Laid off workers may start their own businesses, but profit income from self-employment is not accounted for in GDP e. Unemployed workers have more leisure time to enjoy.
Using Figure 1 above, if the aggregate demand curve shifts from AD2 to AD3 the result in the long run would be:
A. P2 and Y2. B. P1 and Y2. C. P4 and Y2. D. P1 and Y1.