When output is greater than the economy's long-run capacity, which of the following is most likely to occur?
a. a reduction in the general level of prices
b. an abnormally high rate of unemployment
c. increases in real interest rates and real resource prices
d. a reduction in imports
C
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A profit-maximizing firm will hire workers up to the point at which
A) MRP < MFC. B) MRP = MFC. C) MRP > MFC. D) MRP = MPP.
Barriers to entry are forces that:
A. promote a more efficient allocation of resources across the economy. B. limit consumers from purchasing new products. C. limit the government from intervening in markets. D. limit new firms from joining an industry.
Using Figure 1 above, if the aggregate demand curve shifts from AD1 to AD2 the result in the long run would be:
A. P1 and Y2. B. P2 and Y2. C. P3 and Y1. D. P2 and Y3.
The ________ is the number of unemployed divided by the labor force and the ________ is the number of employed divided by the adult population.
A. unemployment rate; employment ratio B. discouraged worker ratio; employment rate C. unemployment rate; employment rate D. unemployment ratio; participation rate