Suppose that a well-respected study published in Child Psychology Today finds that a very high proportion of children raised by stay-at-home fathers are accepted to Harvard University. If a large number of previously working fathers quit their jobs and become stay-at-home dads, which of the following will occur, all else equal? (i) The unemployment rate will decrease. (ii) The size of the labor
force will decrease. (iii) The number of unemployed people will increase. (iv) The unemployment rate will increase.
a. (i) and (ii) only
b. (ii) and (iv) only
c. (i), (ii), and (iii) only
d. (ii), (iii), and (iv) only
b
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What happens to the equilibrium price and quantity in the market for science fiction novels, a normal good, when income increases and a new technology is invented, making it easier to publish books.
a. Quantity and price both increase. b. Quantity and price both decrease. c. Quantity will increase and the price change is ambiguous. d. Price will decrease but the quantity change is ambiguous.
Suppose a war in the Middle East interrupts the flow of crude oil and oil prices skyrocket around the world. For economists, this historical episode serves as a
Which one of the following is not one of the monetary control instruments available to a Central Bank?
(a) Moral suasion (or advice); (b) Reserve requirements; (c) Discount rate; (d) Tax rates.
The current rate of unemployment is 5 percent. This statement:
A) is positive. B) is normative. C) involves a value judgment. D) is a personal reflection and has no value in economics.