By offering more generous unemployment insurance programs, European countries can expect
A) workers to gain new skills quickly in response to fluctuations in the labor market.
B) longer periods of unemployment for their workers.
C) to pay less in taxes than in the United States.
D) shorter periods of unemployment for their workers.
Ques. 2During a(n) ________ many firms experience reduced profits, which reduces ________ and investment spending.
A) recession; government spending B) recession; cash flow
C) expansion; cash flow D) expansion; business confidence
Ques. 3Refer to Figure 18-4. Rank the above panels in terms of most unequal income distribution to least unequal income distribution.
A) Panel C, Panel B, Panel A B) Panel B, Panel C, Panel A
C) Panel A, Panel B, Panel C D) Panel A, Panel C, Panel B
Ques. 4Despite evidence that companies will find it more profitable to use a commission system of compensation rather than a salary system, many companies continue to pay their workers salaries.
Which of the following is one reason why firms choose a salary system?
A) Firms that have salary systems do not have to use compensating differentials to attract employees to do hazardous jobs.
B) Many workers dislike risk and prefer to be paid a salary rather than to be paid by commission.
C) Firms often use salary systems to overcome their principal-agent problems.
D) Most business owners and managers are not trained economists; therefore, they are unaware of the research that shows a commission system is more profitable than a salary system.
Ques. 5Refer to Figure 28-2. The nonaccelerating inflation rate of unemployment, or NAIRU, is associated with which point rate in the figure above?
A) A B) B C) C D) all of the above
Ques. 6Retained earnings are always sufficient to finance a firm's rapid expansion in a high-growth economy.
Indicate whether the statement is true or false
Ques. 7Refer to Figure 26-7. Suppose the economy is in a recession and no policy is pursued. Using the static AD-AS model in the figure above, this situation would be depicted as a movement from
A) B to A. B) C to D. C) A to B. D) C to B. E) A to E.
Ques. 8As the value of the Gini coefficient approaches one
A) income distribution becomes less unequal.
B) the percentage of the population under the poverty line decreases.
C) income distribution becomes more unequal.
D) the percentage of the population under the poverty line increases.
Ques. 9If nominal GDP rises we can say that
A) production has risen and prices remain constant.
B) prices have risen and production remains constant.
C) production has fallen and prices have risen.
D) production has risen or prices have risen or both have risen.
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