Explain how the labor force participation rate and the unemployment rate change in a recession
What will be an ideal response?
The labor force participation rate tends to decrease during a recession as more workers become discouraged. The unemployment rate increases during a recession because there are fewer jobs.
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Which of the following is NOT true about marginal revenue?
A. It is a firm's marginal benefit. B. It is defined as the extra revenue generated by the production of one more unit. C. It can be expressed mathematically as MR = [R(Q - ?Q) - R(Q)]/?Q. D. It can be expressed mathematically as ?R/?Q.
If the natural unemployment rate is 5 percent and the current unemployment rate is 6 percent, then the economy is
A) producing a level of Real GDP that is greater than the level of natural Real GDP. B) in an inflationary gap. C) producing a level of Real GDP that is less than the level of natural Real GDP. D) a and b E) b and c
Monetary policy can affect real variables in the short run if monetary policy:
a. surprises households. b. is unpredictable. c. is random. d. all of the above.
A fall in the price of domestic resources will shift the aggregate:
A. demand curve leftward. B. supply curve leftward. C. supply curve rightward. D. demand curve rightward.