When output increases by 1%, the unemployment rate does not tend to fall by 1% in the short run because
A. as output increases, the size of the labor force increases.
B. the number of people who become employed is less than the number of new jobs created.
C. a firm is likely to meet some of the increase in output by increasing the number of hours worked per job.
D. all of the above.
Answer: D
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If the monthly unemployment rate increase mentioned in the Application wound up being a permanent and not temporary change, the best economic decision by the committee would most likely be to
A) decrease the money supply to stimulate the economy. B) not change monetary policy. C) decrease the money supply to slow the economy down. D) increase the money supply to stimulate the economy.
Refer to Table 4-9. An agricultural price floor is a price that the government guarantees farmers will receive for a particular crop. Suppose the federal government sets a price floor for corn at $12 per bushel
a. What is the amount of shortage or surplus in the corn market as result of the price floor? b. If the government agrees to purchase any surplus output at $12, how much will it cost the government? c. If the government buys all of the farmers' output at the floor price, how many bushels of corn will it have to purchase and how much will it cost the government? d. Suppose the government buys up all of the farmers' output at the floor price and then sells the output to consumers at whatever price it can get. Under this scheme, what is the price at which the government will be able to sell off all of the output it had purchased from farmers? What is the revenue received from the government's sale? e. In this problem we have considered two government schemes: (1 ) a price floor is established and the government purchases any excess output and (2 ) the government buys all the farmers' output at the floor price and resells at whatever price it can get. Which scheme will taxpayers prefer? f. Consider again the two schemes. Which scheme will the farmers prefer? g. Consider again the two schemes. Which scheme will corn buyers prefer?
Which of the following would be least likely to cause the production possibilities curve to shift outward?
a. a decreased desire for leisure by workers in the economy. b. an invention that requires fewer resources to produce a good. c. a shift in consumer preferences that causes expansion in the output of one product and a decline in output of other products. d. an expansion in the man-made productive resources available to the economy as the result of a high rate of investment.
If scientific research produces a technological breakthrough in the production of computer memory, then
a. business costs will increase, profits will fall, and production will decrease. b. business costs will fall, but profits will also fall, and production will decrease. c. business costs will fall, profits will improve, and production will increase. d. profits will increase, allowing businesses to cut back production.