Following the recession of 2001, there was a month in which employment and the unemployment rate both rose. Assuming the computations were correct, how is it possible for both to have increased?
The rate of unemployment is measured as the number of people unemployed divided by the labor force. If the number of people in the labor force rises, but a significant portion of the rise in the labor force is people who are unemployed, then both employment and unemployment could rise.
(This likely happened because as the economy was improving, more people began seeking employment, but not all immediately found employment.)
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Draw a production possibilities frontier for an economy, with the axes labeled “military goods” and “peace goods.” Indicate the region that is attainable and the region that is not. Explain the shape of the curve. What assumptions did you make in drawing it?
What will be an ideal response?
In an indifference curve diagram, the quantities of good Y are measured along the vertical axis and the quantities of good X are measured along the horizontal axis. The marginal rate of substitution is defined as
A) how much good Y you must give up to get one more unit of good X. B) how much good Y you are willing to give up to get one more unit of good X. C) the relative price of good Y in terms of good X. D) how much you prefer to substitute good X for good Y.
Chess is an example of a
A) game with perfect information. B) game with imperfect information. C) game with incomplete information. D) static game.
The double taxation of corporate profit in the United States refers to the fact that
A) tax rates on partnerships are very high. B) depreciation is not a deductible expense. C) corporate profit is first taxed and then any dividends paid are subject to personal income tax. D) proprietorships are not subject to any tax on earnings.