Since services do not involve the production of physical things, they are not included in GDP calculations.
Answer the following statement true (T) or false (F)
False
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A useful economic model
A. deals only with possibilities that actually occurred. B. makes only realistic assumptions. C. may make some unrealistic assumptions in order to simplify a complex reality. D. will avoid conclusions that have public policy implications, because economists do not make value judgments.
Refer to Figure 17-2. Suppose the economy is at point C in the figure above. If workers adjust their expectations of inflation, which of the following will be true?
A) Workers and firms expect inflation to be 1%. B) The short-run Phillips curve will shift to the right. C) The natural rate of unemployment is 6%. D) The economy will move from C to A. E) The short-run Phillips curve will shift to the left.
Labor hoarding occurs when
A) firms keep good workers so other firms can't hire them. B) the unemployment rate exceeds the natural rate of unemployment. C) involuntary unemployment exceeds voluntary unemployment. D) because of hiring and firing costs, firms retain workers in a recession that they would otherwise lay off.
Entry drives economic profits to zero
Indicate whether the statement is true or false