James Anderson used to work in a reputed multi-national company. During a recession, he lost his job. After a few years, he was unable to get a job and his son was forced to forgo his college education. Mr. Anderson's unemployment resulted in _____
a. a loss of lifetime earnings
b. a loss of human capital
c. the deterioration of health
d. a loss of social cohesion
b
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When the Fed decides to enact expansionary monetary policy, the supply of loanable funds:
A. increases, while the demand for loanable funds decreases. B. decreases, while the demand for loanable funds increases. C. and the demand for loanable funds both decrease. D. and the demand for loanable funds both increase.
Suppose the long-run supply curve for a good is upward-sloping. The upward slope could be explained by
a. decreases in production costs resulting from more firms coming into the market. b. a breakdown of the "free entry and exit" feature of competition. c. a breakdown of the "price taking" feature of competition. d. the fact that a resource used in the production of the good is available only in limited quantities.
Countries are unlikely to maintain fixed exchange rates for long periods of time because:
A. fixed exchange rates eventually produce very high levels of inflation. B. fixed exchange rates impede a nation's ability to use monetary and fiscal policy to pursue domestic macroeconomic goals. C. fixed exchange rates promote domestic macroeconomic goals at the expense of international macroeconomic goals. D. they lack the tools to do so.
If the government imposed a green tax on gasoline, the amount of air pollution should
A. Increase as people begin to use public transportation more. B. Decrease as people switch to more fuel-efficient cars, find less fuel intensive alternatives, and drive less. C. Decrease as people switch to larger cars to drive in the country where pollution is not a problem. D. Increase as people begin to use alternative fuels instead of gasoline.