Refer to Figure 23-2. Suppose that the level of GDP associated with point K is potential GDP. If the U.S. economy is currently at point N,
A) firms are operating below capacity.
B) the economy is in an expansion.
C) the level of unemployment is above the natural rate.
D) the economy is at full employment.
B
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If the supply of a factor is perfectly inelastic, then
A) no more than the existing quantity can be supplied. B) the supply curve is horizontal. C) sellers will provide whatever quantity is demanded at the going price. D) a fall in price results in no quantity being supplied.
In the Classical system, the interest rate is determined by all of the following except
A) the thriftiness of the public. B) the money supply. C) the productivity of capital. D) investment.
In behavioral economics, salience is best exemplified by
A) consumers responding differently when posted prices increase rather than when prices increase because of sales tax increases. B) consumers responding the same regardless of how prices change. C) the end of a controlled experiment. D) consumers responding differently when income increases permanently rather than temporarily.
If the estimates of the coefficients of interest change substantially across specifications,
A) then this can be expected from sample variation. B) then you should change the scale of the variables to make the changes appear to be smaller. C) then this often provides evidence that the original specification had omitted variable bias. D) then choose the specification for which your coefficient of interest is most significant.