Answer the following statement(s) true (T) or false (F)
1. The major reason education leads to higher wages is due to signaling.
2. Attending college can be seen as an individual’s attempt to raise their level of human capital.
3. Since mowing ones lawn is not done at their workplace, it is viewed as a use of their leisure time and thus (somewhat paradoxically) falls into the category of leisure.
4. One deficiency of labor-leisure indifference curve analysis is that because indifference curves are always tangent to the worker’s budget line, the model can not explain why some people choose not to work.
5. A firm’s marginal revenue product of labor equals the marginal product of labor times the cost per unit of the labor.
1. False
2. True
3. True
4. False
5. False
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An economy experiences real growth over time with stable aggregate demand. This would likely result in
A) decreasing prices. B) increased unemployment. C) increasing prices. D) secular inflation.
If the U.S. dollar and British pound have a flexible exchange rate, and the U.S. dollar changes so that one needs more dollars to buy one pound, the currency has
A) depreciated. B) appreciated. C) devalued. D) revalued.
The value by which the nominal GDP of an economy exceeds its real GDP in percentage terms is equal to the: a. rate of inflation in the economy. b. rate of deflation in the economy. c. GDP deflator of the economy
d. GDP inflator of the economy.
Which of the following is probably not a goal the Fed is trying to achieve consistently?
a) low inflation b) high interest rates c) steady GDP growth d) low unemployment