Which of the following is the best definition of potential output?
a. The output that could be produced if the economy were above full employment
b. The output that could be produced if the economy had no unemployment
c. The output that could be produced if the economy had no frictional unemployment
d. The output that could be produced if the economy were at full employment
e. The output that could be produced if the economy had no structural unemployment
D
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Firms in an oligopoly market will have a more difficult time maintaining price coordination when:
A) demand for the firms' products remains stable. B) the firms' cost structures are similar. C) the firms' products are highly differentiated. D) each firm controls the same share of the market.
The belief that bank failures were regularly caused by fraud or the lack of sufficient bank capital explains, in part, the passage of
A) the National Bank Charter Amendments of 1918. B) the Garn-St. Germain Act of 1982. C) the National Bank Act of 1863. D) Federal Reserve Act of 1913.
Keynesians explain the procyclical behavior of average labor productivity by introducing the concept of
A) menu costs. B) sticky prices. C) labor hoarding. D) sticky wages.
The consensus among researchers is that union workers earn 15 percent more than otherwise identical nonunion workers. This means unions have probably raised wages
a. exactly 15 percent. b. less than 15 percent. c. at least 15 percent. d. more or less than 15 percent, but one cannot tell exactly.