Suppose the economy is at a short-run equilibrium GDP that lies below potential GDP. Which of the following will occur because of the automatic mechanism adjusting the economy back to potential GDP?

Which of the following best explains the cause of the change in the unemployment rate at the end of a recession?

A) Firms rapidly hire new workers at the first sign of an increase in demand for their goods. B) Firms are hesitant to rehire laid-off workers as they continue to operate below capacity. C) Discouraged workers begin to return to the labor force, causing the unemployment rate to fall. D) Frictionally unemployed workers find it easier to gain employment, lowering the natural rate of unemployment.

Which of the following contributed to the increase in steamboat productivity?

(a) Improvements in ship design (b) Better docking stations (c) Increased competition by railroads (d) All of the above