For most welfare recipients, the negative income tax plan would increase incentives to work
a. True
b. False
Indicate whether the statement is true or false
True
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When the unemployment rate is ________ the natural unemployment rate, real GDP is ________
A) above; increasing B) above; above potential GDP C) below; above potential GDP D) below; increasing E) equal to; either equal to potential GDP or above potential GDP
If a firm wants to maximize profits it should
A) hire lots of capital and very little labor since labor needs to be trained. B) hire unskilled labor rather than skilled labor since unskilled labor is cheaper. C) equate the marginal physical product for each input to the price of the input. D) equate the marginal revenue product for each input to the price of the input.
Economists studying the impact of currency unions on trade found currency unions:
A) increased levels of trade by 221%. B) increased levels of trade by 104%. C) increased levels of trade by 38%. D) had no effect on trade levels.
In international trade jargon, an economy is said to be a large country if
A. it is a price-taker in the world market. B. a decline in its imports does not affect its terms of trade. C. a majority of its production is consumed domestically. D. a decline in its exports raises the world price of those goods.