According to classical economists,
a. full employment means zero unemployment
b. as long as markets clear, no government action is needed to ensure full employment
c. even if all markets clear, government action is needed to correct labor market imperfections if the economy is to reach full employment
d. as long as markets clear and government provides jobs to those who need them, the economy will be at full employment
e. even if markets clear, cyclical unemployment will still persist in the long run
B
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Suppose the equilibrium price of milk is $3 per gallon but the federal government sets the market price at $4 per gallon. The market mechanism will force the milk price back down to $3 per gallon unless the government:
A) rations the excess demand for milk among consumers. B) buys the excess supply of milk and removes it from the market. C) Both A and B are plausible actions. D) The government cannot maintain the price above the equilibrium level.
If marginal costs are virtually zero after initial units are produced
A) inventors need to sell lots of units to make money. B) inventors need to be paid upfront. C) inventors need to sell their patents. D) none of these choices.
If society were to experience an increase in its available resources its production possibilities frontier would:
A. shift in. B. not move. C. become convex. D. shift out.
As the firm in the diagram expands from plant size #1 to plant size #3, it experiences:
A. diminishing returns.
B. economies of scale.
C. diseconomies of scale.
D. constant costs.