Refer to Table 17.1. The labor force participation rate for this simple economy is
A) 25%.
B) 40%.
C) 50%.
D) 60%.
C
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If the Federal Reserve decreases the Federal funds rate, other short-term interest rates ________ and the exchange rate ________
A) fall; falls B) do not change; rises C) fall; does not change D) fall; rises E) do not change; falls
In a small economy in 2016, aggregate expenditure was $800 million while GDP that year was $850 million. Which of the following can explain the difference between aggregate expenditure and GDP that year?
A) Aggregate expenditure is always less than GDP in developed countries. B) Firm investment in inventories was greater than anticipated in 2016. C) Aggregate expenditure is always less than GDP in developing countries. D) Firm investment in inventories was less than anticipated in 2016.
All of the following are characteristics of a perfectly competitive market EXCEPT
A) homogeneous products. B) large number of buyers and sellers. C) buyers and seller have equal access to information. D) high barriers to entry and exit.
The Cobb-Douglas production function is: Q = 1.4*L0.6*K0.5 . What would be the percentage change in output (%?Q) if labor grows by 3.0% and capital is cut by 5.0%? [HINT: %?Q = (EL * %?L) + (EK * %?K)]
a. %?Q = + 3.0% b. %?Q = + 5.0% c. %?Q = - 0.70% d. %?Q = - 2.50% e. %?Q = - 5.0%