If resources are underemployed, then the economy is producing as much as possible
Indicate whether the statement is true or false
F
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An important source of structural unemployment is
A) recessions. B) people looking for the right job decide to change jobs. C) unemployment insurance benefits. D) seasonal variations in aggregate demand.
Suppose the demand for large (and therefore high-gasoline consumption) cars decreases sharply during an energy crisis. The most likely market adjustment would be
a. a sharp rise in the price of large cars in the short run as people rush to purchase these vehicles before producers cut back on manufacturing them. b. a moderate increase in short-run prices, followed by a larger long-run price increase as the supply of large cars is depleted. c. lower short-run prices, which will lead to an expansion in the number of large cars sold. d. a decrease in the price of large cars in the short run, leading to a reduction in output, which will moderate the price decline in the long run.
As we work fewer hours and our leisure time increases, the opportunity cost of labor
A. Rises and the marginal utility of income rises. B. Falls and the marginal utility of income falls. C. Falls and the marginal utility of income rises. D. Rises and the marginal utility of income falls.
Financial markets do not function as well as they could due to:
A. the cost of obtaining information which can be high. B. fluctuations in the inflation rate. C. regulation by governments. D. the fact that banking is highly monopolized.