Which of the following statements is true?
A. The duration of unemployment increases during economic expansions.
B. The median duration of unemployment is usually greater than the average duration.
C. The unemployment rate does not tell us anything about the duration of unemployment.
D. The duration of unemployment decreases during recessions.
Answer: C
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Which is not true for a monopolistically competitive industry?
A. Firms tend to operate with excess capacity. B. Firms operate at the lowest point of their ATC curves in the long run. C. Each firm faces a downward-sloping demand curve. D. These firms earn zero economic profits in the long run.
The markets for renewable and nonrenewable resources operate to ensure that:
a. the producers using these resources earn above-normal profits even in the long run. b. the current and future prices of such resources remain high. c. the cost of extraction of such resources increases with an increase in price. d. the current price of such resources should remain low but the future prices should increase to increase profitability of the producers. e. the current and future wants for these resources are satisfied in the least costly manner.
If a market is allowed to adjust freely to its equilibrium price and quantity, then an increase in demand will
a. increase producer surplus. b. reduce producer surplus. c. not affect producer surplus. d. Any of the above are possible.
The absolute value of the slope of the budget line is:
A. the ratio of the marginal utility of one good to the marginal utility of the other good. B. the ratio of the marginal utility of one good to the price of the other good. C. the ratio of the price of one good to the price of the other good. D. dependent on consumer income.