Cyclical unemployment occurs when real GDP falls below potential GDP.
Answer the following statement true (T) or false (F)
True
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U.S. labor productivity slowed during the 1970s because of
i. increasing government taxes and regulations on production. ii. the necessity to cope with energy price increases. iii. inflation, which shortened the horizon over which businesses made their borrowing plans. A) i only B) ii only C) iii only D) Both i and ii E) i, ii, and iii
It is often stated that the Japanese firms develop and adapt new technology to manufacturing process twice as fast as U.S. firms. If this is true, ceteris paribus, we would conclude that the
A) depreciation rate of capital does not change, but the user cost of capital increases. B) depreciation rate of capital increases, but the user cost of capital decreases. C) depreciation rate of capital increases, and the user cost of capital increases. D) U.S. interest rate is too high, preventing American manufacturers from adopting new technologies.
Which of the following is not likely to contribute to economic growth?
A. Technological development B. Government planning C. Institutions with incentives compatible with growth D. Entrepreneurship
According to behavioral economics:
A. gains are felt more intensely than losses. B. each successive unit of loss is equal in its marginal disutility. C. each successive unit of loss hurts, but less than the previous unit. D. each successive unit of loss hurts, and more than the previous unit.