Explain how productivity growth has led to labor market realignment in the United States.
What will be an ideal response?
Productivity has cut jobs drastically in some parts of the economy, sending the labor force to other economic sectors for employment. At the time of the American Revolution, nearly 90 percent of the U.S. labor force had agricultural jobs. Yet today, with less than 2 percent of the nation’s labor working on farms, the United States produces such a surplus of products that it sometimes seems unmanageable. At first, after the huge drop in farm jobs was under way, the farm workers shifted to manufacturing, as growing U.S. incomes raised demand for industrial products sharply. Then productivity in manufacturing took off, and workers again had to move elsewhere into the service sector of the economy. Indeed, it has transformed the United States into a “service economy,” with more than three-quarters of the labor force employed in services.
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If firms accused of antitrust violations sign a consent decree, they have
a. admitted guilt and accept the lawful penalties b. admitted guilt, but are relieved of any penalties by agreeing to cease the violations c. agreed to cease the alleged wrongdoing, without admitting guilt d. denied the accusation and requested a formal hearing or trial e. denied the accusation and given proof that it is untrue
Continuous rapid growth of the money supply relative to the growth of real output will most likely lead to
a. persistent inflation. b. low nominal interest rates. c. high rates of real economic growth. d. low unemployment.
Is it correct to say that if the total balance of payments does not equal zero, then the reserves account will automatically adjust to ensure it equals zero
a. Yes. b. No. c. The answer is "maybe" because it always depends on the circumstances.
Two firms, A and B, each currently dump 50 tons of chemicals into the local river. The government has decided to reduce the pollution and from now on will require a pollution permit for each ton of pollution dumped into the river. The government will sell 40 pollution permits for $75 each. It costs Firm A $100 for each ton of pollution that it eliminates before it reaches the river, and it costs
Firm B $50 for each ton of pollution that it eliminates before it reaches the river. Neither firm produces any less output, but they both conform to the law. It is likely that between the cost of permits and the cost of additional pollution abatement, a. Firm B will spend $3,500. b. Firm A will spend $4,000. c. Firm A will spend $4,500. d. Firm B will spend $3,000.