If two or more markets are closely related,
A) a partial equilibrium analysis will tend to overstate the price impact of a supply shock.
B) a partial equilibrium analysis will tend to accurately predict the price impact of a supply shock.
C) a partial equilibrium analysis will tend to understate the price impact of a supply shock.
D) they should be analyzed concurrently but using partial equilibrium analysis alone.
C
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Employing an additional 1 billion hours of labor increases real GDP by $12 billion. Employing another 1 billion hours beyond the first 1 billion increases real GDP by $11 billion
Hence we can conclude from this information that as employment increases, real GDP A) increases at an increasing rate. B) decreases at an increasing rate. C) decreases at a decreasing rate. D) increases at a decreasing rate. E) falls from $12 billion to $11 billion as more workers are hired.
When, because of hiring and firing costs, firms retain workers in a recession that they would otherwise lay off, there is said to be
A) labor hoarding. B) a decline in capacity utilization. C) voluntary unemployment. D) involuntary unemployment.