Why is the economy at full employment in the long run?
A) Only wages have the ability to adjust.
B) Only price can adjust.
C) Prices don't adjust.
D) Wages and the price level eventually adjust to full employment equilibrium levels.
E) Government policies eventually converge on the full employment strategy.
D
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Bob inherits a large sum of money from his dead uncle's estate. Bob decides to retire young, so he quits his job and heads to the Bahamas. Bob is an example of
A) frictional unemployment. B) structural unemployment. C) cyclical unemployment. D) None of the above is correct.
Suppose there is no inflation, and the current interest rate is 4% per year. Erin plans to open a savings account and deposit $100 annually for the next 5 years. She plans to leave this money untouched for 10 more years. At the end of the period, the balance of her savings account will be
A) 2500(1.045 - 1). B) 2000(1.0415-1). C) 2000(1.045 - 1)(1.04)10. D) 2500(1.045 - 1)(1.04)10.