Which of the following is true?
A) Real GDP fluctuates around potential GDP.
B) Potential GDP fluctuates around real GDP.
C) Nominal GDP fluctuates around real GDP.
D) Real GDP fluctuates around nominal GDP.
E) When real GDP equals potential GDP, both equal nominal GDP.
A
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Insurance companies reduce risk exposure in exchange for a portion of their insurance premiums by obtaining
A) government loan guarantees. B) federal insurance. C) reinsurance. D) bankers acceptances.
In what way do competitive markets have a "natural remedy" for discriminatory hiring practices?
a. Governments regulate to resolve problems of discrimination. b. Profit-maximizing firms that do not discriminate tend to replace firms that discriminate. c. Wages paid to groups that are victimized by discrimination are eventually bid up to above-equilibrium levels. d. Discrimination is usually the outcome of rational decision-making processes, and competitive markets produce rational outcomes.