Referring to the graph above, assume that, at first, the labor market is in equilibrium at point 4. In which scenario does unemployment rise, with no change in the quantity of employment?
A) real wage rises to the level of points 1 and 2
B) supply shifts to pass through point 5, with no change in the real wage
C) demand shifts to pass through point 3, with no change in the real wage
D) supply shifts to pass through point 3, with no change in the real wage
B
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Referring to Table 12.2, if the nominal interest rate is 8.5 percent and there is no inflation, which investments will be undertaken?
A) D, E B) E C) C, E D) none of the above
What is the "omitted variable" problem in determining cause and effect?
A) It is a problem that arises when an economic variable that affects other variables is omitted from an analysis and its omission leads to false conclusions about cause and effect. B) It is a problem that arises when a significant variable is not given enough weight in an economic experiment leading to skewed conclusions about cause and effect. C) It is a problem that arises when an insignificant economic variable that should have been omitted is included in an economic experiment leading to false conclusions about cause and effect. D) It is a problem that arises when an insignificant variable is given too much weight in an economic analysis leading to skewed conclusions about cause and effect.