As the U.S. economy relies more and more heavily on the production of services rather than goods,
A. Mass unemployment will result.
B. GDP will decrease since there will be less real production.
C. Nearly all future job growth will be in service-producing industries.
D. International trade will become more difficult.
Answer: C
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Tim's Solar Panel Co manufactures and distributes solar panels in the U.S. market. Two years prior, it had 5 competitors in the market. However, government stimulus in the industry has now encouraged 7 new competitors to enter the market. At equilibrium, the price of Tim's panels: a. is less than the average variable cost of production
b. is dictated by the forces of demand and supply present in the market. c. is less than the fixed cost of production. d. decrease in order to stay ahead of its competitors in the market.
Using typical estimates of the sacrifice ratio, how much output would likely be sacrificed to reduce inflation by 3 percent?