If firms seek an average markup of 25% over labor costs and workers demand real hourly wages equal to $10 – 100u where u is the unemployment rate, then the equilibrium rate of unemployment will be
a) 4.6%
b) 8%
c) 9.2%
d) 10%
e) 25%
c) 9.2%
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If the Fed can communicate that it will maintain a(n) ________, the long run nominal interest rate will remain ________
A) expansionary fiscal policy; low B) contractionary fiscal policy; high C) contractionary monetary policy; low D) expansionary monetary policy; low
Sam quits his job as an airline pilot and opens his own pilot training school. He was earning $40,000 as a pilot. He withdraws $10,000 from his savings where he was earning 6 percent interest and uses the money in his new business. He uses a building he owns as a hangar that he could have rented out for $5,000 per year. He rents a computer for $1,200, buys office supplies for $500, rents an
airplane for $6,000 . pays $1,300 for fuel and maintenance, and hires one worker for $30,000 . Sam's total revenue from pilot training classes this year equaled $90,400 . How did Sam's business do this year? a. Sam realized an economic profit of $3,400 this year. b. Sam realized an economic loss of $3,400 this year. c. Sam realized an economic profit of $5,800 this year. d. Sam realized an economic profit of $3,800 this year. e. Sam realized an economic loss of $3,800 this year.
Which of the following is a diversity of industry argument in favor of restrictions on foreign trade? a. Foreign producers must be prevented from exporting their goods below cost of production
b. Domestic workers must be protected from the lower wages paid in foreign countries. c. The nation's security demands we ensure an adequate domestic supply of certain strategic goods. d. Don't have all of your eggs in one basket. e. Industries in the early stages of development must be protected from more mature producers.
The claims of the owners of a firm against the firm's assets are called:
A. working capital. B. assets. C. net worth. D. liabilities.