The share of long-term unemployment:
A. increases with the amount of labor market rigidity, which explains why the United States has more long-term unemployment than Europe.
B. decreases with the amount of labor market rigidity, which explains why Europe has more long-term unemployment than the United States.
C. increases with the amount of labor market rigidity, which explains why Europe has more long-term unemployment than the United States.
D. decreases with the amount of labor market rigidity, which explains why the United States has more long-term unemployment than Europe
Ans: C. increases with the amount of labor market rigidity, which explains why Europe has more long-term unemployment than the United States.
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In a certain monopolistically competitive market that is characterized by high prices and equally high-quality merchandise, if a firm's competitors begin to successfully introduce new products that cut into the firm's market share, the firm's best counter-strategy is to:
a. raise prices in order to increase the revenue. b. introduce few new products in order to meet competitors head on. c. reduce its advertising budget in order to save costs. d. ignore its competitors and hope its customers' loyalty carry it through the threat. e. look to the government for protection.
One fundamental idea in macroeconomics about inflation is:
A. when all prices rise, inflation occurs and everyone is worse off. B. if all prices decline, the purchasing power of everyone declines. C. if all wages rise, then inflation doesn't really affect anyone's purchasing power. D. keeping prices constant is the only way to ensure increasing purchasing power over time.