During times of high unemployment, colleges often observe an increase in enrollment even if tuition remains unchanged. Why?
A. Students go to college even when the net benefit is negative.
B. The opportunity cost of attending college is higher when unemployment is high.
C. The benefit of attending college is lower because college graduates are less likely to find jobs.
D. The opportunity cost of attending college is lower when unemployment is high.
Answer: D
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The self-correcting property of the economy means that output gaps are eventually eliminated by:
A. increasing or decreasing potential output. B. government policy. C. decreasing inflation only. D. increasing or decreasing inflation.
In the above figure, the economy is at point a on the initial supply of loanable funds curve SLF0. What happens if disposable income decreases?
A) Nothing; the economy would remain at point a. B) There would be a movement to a point such as b on supply of loanable funds curve SLF0. C) The supply of loanable funds curve would shift rightward to a curve such as SLF2. D) The supply of loanable funds curve would shift leftward to a curve such as SLF1.
Which of the following policies would be most likely to reduce the rate of inflation?
a. sale of government bonds by the Federal Reserve b. a reduction in the discount rate c. an increase in the size of the federal budget deficit d. a reduction in the required reserves imposed on the banking system
Barriers that prevent workers from entering particular labor markets
a. decrease wage rates in those markets b. increase employment in those markets c. decrease discrimination in those markets d. increase profits in those markets e. increase wage rates in those markets