1. When there is comparative advantage the supply curve shifts to the right as p
ID: 1128450 • Letter: 1
Question
1. When there is comparative advantage the supply curve shifts to the right as
price falls and quantity increases.
True or False
2. If there is a recessionary gap to get to equilibrium full employment
A. Government spending must rise.
B. The AE curve must shift left.
C. Government spending must fall.
D. The AE curve must shift down.
3. One protection against unemployment is
A. Increased human capital.
B. Lower education.
C. Lower human capital.
D. Lower skill levels.
4.Newspaper job classifieds might mainly be frictional unemployment since
A. Firms are looking to fill job openings when workers leave one job for another.
B. Firms are looking to layoff workers when they complain tremendously.
C. Firms are looking to layoff workers when they are unhappy.
D. Firms are looking to hire workers they know rather than they don’t know.
5. Full employment can mean that
A. Quantity supplied is not equal to quantity demanded.
B. Quantity supplied equals quantity demanded in the labor market.
C. Quantity supplied is less than quantity demanded in the labor market.
D. Quantity supplied is greater than quantity supplied in the labor market.
Explanation / Answer
1. ans : True. Because any change in an underlying determinantof supply, such as a change in the availibility of factors, or changes in weather, taxes, and subsidies, will shift supply curve to left or right. When price falls supply curve shifts to right and quantity increases.
2. Ans : A governmentn spending must rise. When an economy is currently below its long-run real GDP level, there will be economic unemployment of resources, which will lead to an economic recession. The long-run real GDP level represents what economy can produce had it been under full employment.
3. Ans: A incresed human capital.
4. Ans : A Firms are lookinf to fill job openings when workers leave one job for another. As frictional unemployment exist because both jobs and workers are heterogeneous.
5. Ans: C Quantity supplied is less than quantity demanded in the labor market.
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