(Consider This) Which of the following best explains why unemployment rises significantly during a recession?
A. Wages are sticky both upward and downward.
B. Wages are flexible both upward and downward.
C. Wages are flexible upward but sticky downward.
D. Wages are sticky upward but flexible downward.
C. Wages are flexible upward but sticky downward.
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Consider an economy where the growth rate of money supply is 2% and the inflation rate is 2%. If the quantity theory of money holds, the growth rate of real GDP in the economy will be:
A) 2%. B) 4%. C) 1%. D) 0%.
If the net present value is exactly equal to zero, the present value of the investment's stream of future operating profits is ________ the present value of its cost.
A) exactly double B) greater than C) equal to D) less than
An open-market purchase of foreign bonds to increase a central bank's international reserves:
A. increases the central bank's liabilities and decreases its assets. B. increases the central bank's liabilities and assets. C. decreases the central bank's assets and liabilities. D. increases the central bank's assets but decreases its liabilities.
The change in the quantity of labor demanded resulting from a change in the relative cost of labor is known as the ________ effect.
A. input-substitution B. price elasticity C. output D. derived demand