Long-run unemployment in the classical model is considered to be impossible because
A. the government will intervene to aid the unemployed.
B. the labor supply is horizontal.
C. flexible prices and wages keep workers fully employed.
D. job placement and training programs are rampant in the United States.
Answer: C
Economics
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In the long run, the real interest rate is 3 percent, real GDP grows at 4 percent, velocity is constant, and the quantity of money grows at 8 percent. The nominal interest rate is
A) 7 percent. B) 12 percent. C) 10 percent. D) 8 percent. E) 6 percent.
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Voluntary exchange
A) will eliminate scarcity. B) is a nonprice rationing device. C) is trading so that the consumer and producers are better off. D) never involves transactions costs.
Economics