If the economy is in a recession, it means that:
A. the short-run equilibrium is to the left of the long-run aggregate supply curve.
B. total output is less than potential output.
C. the economy is not in long-run equilibrium.
D. All of these are true.
Answer: D
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Which of the following individuals is most likely to migrate to Switzerland, assuming that all face equally good prospects of securing a good job after arrival?
A. Ricardo is 25 years old, single, and currently lives in Italy. B. Ivan is 50 years old, married, and currently lives in Russia. C. Maria is 40 years old, married with three children, and currently lives in Mexico. D. Tran is 35 years old, single, speaks only Vietnamese and a little English, and currently lives in Vietnam.
A price floor is
a. a maximum price above which the good cannot be legally bought or sold b. the lowest price buyers are willing to pay for a good. c. a minimum price below which the good cannot be legally bought or sold. d. a minimum price above which the good cannot be legally bought or sold.
The crowding-out effect stresses that increased government borrowing to cover a budget deficit will cause
a. a higher interest rate and depreciation of the U.S. dollar. b. a higher interest rate and appreciation of the U.S. dollar. c. a lower interest rate and depreciation of the U.S. dollar. d. a lower interest rate and appreciation of the U.S. dollar. e. no change in the interest rate and depreciation of the U.S. dollar.
To examine how the total production of an economy has changed over time, it would be better to examine
A) real GDP. B) nominal GDP. C) GDP at current prices. D) the GDP deflator.