What is the likely consequence of an unemployment rate falling below the rate at which "full employment" is achieved?
A. The threat of recession.
B. An increase in discouraged workers.
C. Increased inflationary pressures.
D. None of the choices are correct.
Answer: C
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Starting from long-run equilibrium, a large increase in government purchases will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. expansionary; higher; potential B. recessionary; higher; potential C. recessionary; lower; lower D. expansionary; higher; higher
Describe the transition from short-run to long-run equilibrium in a monopolistically competitive industry
What will be an ideal response?
Mary decreases her consumption of Good X after the price of Good Y decreased. For Mary
A) Good X and Good Y are substitutes. B) Good X and Good Y are complements. C) Good X is an inferior good. D) Good Y is an inferior good.
The labor-force participation rate tells us the fraction of the population that has chosen to participate in the labor market
a. True b. False Indicate whether the statement is true or false