Recently, salmonella outbreaks occurred due to the contamination of the processing of peanuts. Given this information, it is likely that:
A) The price of peanut products would rise and the quantity of peanut products produced would fall.
B) The price of peanut products would rise and the quantity of peanut products produced would rise.
C) The price of peanut products would fall and the quantity of peanut products produced would fall.
D) The price of peanut products would fall and the quantity of peanut products produced would rise.
Answer: C
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If the unemployment rate is less than the natural unemployment rate, then
A) there is no frictional unemployment. B) cyclical unemployment is greater than zero. C) real GDP is less than potential GDP. D) real GDP is greater than potential GDP. E) frictional unemployment is negative.
What could result in an increase of consumption demand and a decrease in labor supply?
A) a drop in current taxes B) an increase in future taxes C) a decrease in total factor productivity D) an increase in government expenses