When an economy experiences long-run growth there will be:
A. An increase in potential GDP.
B. An increase in the use of existing productive capacity.
C. A shift in aggregate supply to the left.
D. A commitment to expansionary fiscal policy.
A. An increase in potential GDP.
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Unemployment insurance contributes to structural unemployment by:
A. allowing unemployed workers to search longer or less intensively for jobs. B. keeping wages above the market-clearing level. C. keeping wages below the market-clearing level. D. forcing unemployed workers to take the first job offered to them.
If the price of a product decreases, we would expect
What will be an ideal response?
Other things being equal, what is the effect of government deficit increases on interest rates?
A. Interest rates decline. B. Interest rates rise. C. There is no impact unless the Federal Reserve decides to alter the money supply. D. Interest rates hold constant because the demand for credit decreases.
One decision that all firms must make is how much output to supply.
Answer the following statement true (T) or false (F)