Under adaptive expectations theory, a decrease in the short-run aggregate demand curve ____ the inflation rate and ____ the unemployment rate.
A. increases; increases
B. increases; decreases
C. decreases; increases
D. decreases; decreases
Answer: C
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The concept of network externalities is most relevant to purchasers of
a. computer software. b. automobiles. c. television sets. d. radios.
Referring to the Production Possibilities Frontiers in Figure 1.11 A and B, which depicts generalized growth?
Figure 1.11
A. Fig. A B. Fig. B C. Either Fig. A or B is correct D. Neither Fig. A nor B are correct
Initially, workers in the shoe industry and the computer industry earn the same wage. Reductions in trade barriers give domestic consumers access to cheaper shoes produced abroad, which causes domestic shoe prices fall. At the same time, foreign consumers purchase more computers, raising the relative price of computers. As a result of these changes, the demand for labor in the shoe industry ________ and the demand for labor in the computer industry ________.
A. increases; increases B. decreases; decreases C. increases; decreases D. decreases; increases
According to Edward Denison, the major source of labor productivity is
a. improvements in labor quality. b. economies of scale. c. the changing composition of the labor force. d. technological progress. e. education per worker.