Short-run macroeconomic equilibrium occurs when
A) structural and frictional unemployment equal zero.
B) the equilibrium lies on the long-run aggregate supply curve.
C) aggregate demand and short-run aggregate supply intersect.
D) A and B
C
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A manufacturer of wood chippers estimates that the probability of a fatal accident caused by the design of its product is 1/40,000 and the value of a life lost is $2 million
The manufacturer can change the design to eliminate that chance for $60 per wood chipper and is prepared to incorporate all cost-justified precautions. Will the manufacturer change the design? What would the benevolent social planner think about the manufacturer's decision if the true probability of a fatal accident is actually 1/30,000?
A Chinese company exchanges yuan (Chinese currency) for dollars. It uses these dollars to purchase scrap metal from a U.S. company. As a result of these transactions, Chinese
a. net exports increase, and U.S. net capital outflow increases. b. net exports increase, and U.S. net capital outflow decreases. c. net exports decrease, and U.S. net capital outflow increases. d. net exports decrease, and U.S. net capital outflow decreases.