"In the classical model, the equilibrium level of real Gross Domestic Product (GDP) is completely supply-determined." Do you agree or disagree? Why?
What will be an ideal response?
Agree. The long-run aggregate supply curve is vertical, so the equilibrium level of real Gross Domestic Product (GDP) is determined by the location of the aggregate supply curve. Shifts in aggregate demand affect only the price level.
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In the United States today, economists estimate that the natural rate of unemployment is between ________ and ________ percent
A) 3; 5.5 B) 3; 4 C) 6.5; 7.5 D) 5; 6.5
The new endogenous growth theory concludes that sustained economic growth in a country comes from the interaction of labor, investments in physical and human capital, and what is perhaps the key ingredient:
A) natural resources. B) the production of ideas. C) post-secondary education within that country. D) immigration into that country.
An advantage of automatic stabilizers is that
A. they are built into the economy by legislation and therefore are already in place when economic conditions change. B. they give the government an opportunity to spend extra tax money collected. C. they intensify changes in the business cycle. D. they produce balanced budgets.
By 1980, the unemployment rate in the United States for women was essentially the same as that for men
a. True b. False Indicate whether the statement is true or false