The shortfall between actual real GDP and potential GDP
a. decreases as the unemployment rate rises.
b. increases as the unemployment rate rises.
c. increases as the employment rate rises.
d. decreases as the labor force increases.
b
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If the government increases funding to college work-study programs, which of the following would happen in the labor market?
a. Wages will increase and the labor force will increase. b. The labor force will decrease but there will be an ambiguous change in the wage. c. Wages will decrease and the labor force will increase. d. The labor force will increase but there will be an ambiguous change in the wage. e. Wages will increase and the labor force will decrease.
Which of the following does not describe a characteristic of short-term economic fluctuations?
A. Expansions and recessions are felt in only a few sectors of the economy. B. The unemployment rate rises during recessions. C. Durable-goods industries are more sensitive to short-term fluctuations than service and non-durable industries. D. Expansions and recessions are irregular in length and severity.