Unemployed workers in Bosnia could receive up to 30 weeks of unemployment insurance. However, during a recent recession, the government extended the eligibility period to 45 weeks
How is this change in policy likely to affect the labor market in Bosnia?
Such a policy is likely to have complex effects on the labor market in Bosnia. Lengthening eligibility to 45 weeks will reduce the hardships that unemployed workers suffer and give them more time to find a job that is a good fit for their skills, but lengthened eligibility will also partially reduce the incentive for unemployed workers to find new jobs. This will shift the labor supply curve of Bosnia to the left, which, holding all else equal, will reduce employment.
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If instead the government set the abatement standard at 50 million tons per year, would that standard be too lenient or too restrictive at the national level? Support your answer with specific values.
Hypothetically, suppose a recent study of hazardous waste abatement (A) arrives at the following national estimates for abating chemical solvents: MSB = 100 – 0.75A and MSC = 20 + 0.50A, where A is measured in millions of tons per year, and costs are measured in millions of dollars.
Purchasing power parity can be used as
A) a long-run gauge, but in the short run large deviations in currency values can exist. B) a short-term gauge, but in the long run large deviations in currency values can exist. C) an indicator of how interest rates will change in the short run. D) an indicator of how interest rates will change in the long run. E) a short-term and long-term gauge of relative currency values.
Other things the same, as the real interest rate rises
a. domestic investment and net capital outflow both rise. b. domestic investment and net capital outflow both fall. c. domestic investment rises and net capital outflow falls. d. domestic investment falls and net capital outflow rises.
Many tout that the Internet has lowered consumers' search costs. If this is true, ceteris parabis, the consumer reservation price should:
A. remain the same. B. be higher. C. be lower. D. There is insufficient information to determine the impact of lower search costs on reservation prices.