Financial intermediaries, through their ability to lower transaction costs:
A. increase the amount of trading that occurs in an economy.
B. allow for people to be more self-sufficient.
C. reduce the number of financial transactions that occur.
D. take people away from their comparative advantage.
Answer: A
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According to the AS-AD model, when real GDP exceeds potential GDP, the unemployment rate is definitely
A) less than the natural unemployment rate. B) greater than the natural unemployment rate. C) rising. D) falling. E) equal to the natural unemployment rate.
The absence of cyclical unemployment means the economy is at the natural unemployment rate
Indicate whether the statement is true or false
Suppose your neighbor owns a restaurant and boasts that he is able to turn a handsome accounting profit because of his low labor costs. He attributes this to the fact that he uses his sons and daughters as cooks and waiters
His point is that he offers them below-market wages. How would you respond to your neighbor's statement? What would you tell him to expect as his children continue to work for him while they are in college and beyond?
Compared to the averages for post World War II recessions, the recession of 2007-2009 was ________ in duration and the decline in real GDP was ________
A) shorter; smaller B) longer; smaller C) longer; greater D) shorter; greater