Suppose the economy is experiencing a recessionary gap. In the long run, the money wage rate ________, unemployment ________, and the price level ________.
What will be an ideal response?
) falls; falls; falls
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What would be an example of a consumption good?
A) Donald Trump purchases furniture for his office. B) Antonio, the manager of the local Taco Hut, purchases a new deep fryer. C) Jake buys an iPhone. D) The local driver's license office purchases a new digital camera and printer. E) Rhianna gets a haircut.
If a one-year bond is purchased for $700 and the interest rate is 5 percent, what will it pay in one year?
A) $35 B) $665 C) $735 D) $770
Cyclical unemployment is
A) the total of structural and frictional unemployment. B) created by a recession. C) part of frictional unemployment. D) higher when the economy is expanding. E) always greater than the total of structural and frictional unemployment.
Which of the following is a case of asymmetric information:
A. The buyer and seller of a used car don’t know how long the car will operate. B. A provider of health insurance does not know whether a specific client is a smoker or not. C. Neither you nor the insurance company has perfect information about whether a flood will occur. D. None of the above are examples of asymmetric information.