Explain why the prices of farm products are subject to abrupt short-term swings.
What will be an ideal response?
The prices of farm products are subject to abrupt short-term swings because good weather can lead to large harvests and severe price drops, whereas bad weather can lead to small harvests and severe price increases. In addition, there are time lags that intensify short-term price swings.
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Frictional unemployment will always exist since
A) some workers will always want to make a job transition. B) the capitalist system promotes unemployment. C) mismatches in skills will always exist. D) the U.S. economy will continue to shrink.
In recent years, Japan, Germany, the UK, and the US have financed most investments
a) from retained earnings b) by borrowing from banks c) by issuing bonds d) by issuing new equity, or shares of stock e) by using trade credit and capital transfers
Actual unemployment can fall below the natural rate of unemployment due to:
A. structural unemployment. B. negative cyclical unemployment. C. frictional unemployment. D. All of these.
If a 35 percent increase in price of golf balls led to an 42 percent decrease in quantity demanded, then the demand for golf balls is
A) relatively elastic. B) relatively inelastic. C) perfectly elastic. D) unit elastic.