ECO 155 Final

If v = 4%, P = 3%, and YR = 2%, then M must equal: (a) 1%. (b) 1.5%. (c) 7%. (d) 6%.

(a) 1%.

An asset that without loss of value can be quickly converted into money: (a) is a liquid asset. (b) must rise in value over time. (c) is nonexistent. (d) is housing.

(a) is a liquid asset.

If employers can fire an employee for any reason, other things being equal: (a) it will be easier for job seekers to find employment. (b) it will be more difficult for job seekers to find employment. (c) the long-term unemployment rate will be higher. (d) labor markets will be less flexible and dynamic.

(a) it will be easier for job seekers to find employment.

Deflation: (a) lowers the nominal value of debts. (b) raises the real value of debts. (c) raises the nominal value of debts. (d) lowers the real value of debts.

(b) raises the real value of debts.

If the average reserve ratio in the banking system is 20% and the Fed increases bank reserves by $100,000, what will be the total potential increase in the money supply? (a) $120,000 (b) $100,000 (c) $2 million (d) $500,000

(d) $500,000

A country has two income tax brackets: people pay 10% on their first $50,000 and 20% on everything they earn over $50,000. If someone earns $75,000, what is that person's average tax rate? (a) 13.3% (b) 20% (c) 10% (d) 15%

(a) 13.3%

In a small economy, the quantity of money circulating in the economy is $2.5 million. Real GDP for the current year is $5 million, and the average price level is 2. What is the velocity of money? (a) 4 (b) 2 (c) 2.5 (d) 7.5

(a) 4 (MV=PQ)

If the average price level rises from 120 in year 1 to 130 in year 2, the inflation rate between years 1 and 2 will be: (a) 8.33%. (b) 7.69%. (c) 10%. (d) 9.23%.

(a) 8.33%.

Which of the following individuals can be counted as unemployed? (a) Jean, who left her job to search for a higher-paying position (b) Stewart and Susan, who are currently housed in a mental institution (c) Jason and Jill, who have not looked for work for the last 2 years (d) Hannah and Harold, who are serving time for armed robbery

(a) Jean, who left her job to search for a higher-paying position

The main cause of higher government spending in the future will be: (a) Medicare, Medicaid, and Social Security. (b) national defense and foreign aid. (c) unemployment insurance and welfare spending. (d) spending on roads, bridges, and infrastructure.

(a) Medicare, Medicaid, and Social Security.

Which of the following statements about the employment-at-will doctrine is TRUE? (a) The doctrine helps lower labor hiring and ring costs, leading to lower unemployment rates. (b) The doctrine helps raise labor hiring and ring costs, leading to higher unemployment rates. (c) The doctrine helps raise labor hiring and ring costs, leading to lower unemployment rates. (d) The doctrine helps lower labor hiring and ring costs, leading to higher unemployment rates.

(a) The doctrine helps lower labor hiring and ring costs, leading to lower unemployment rates.

Which of the following is a case of frictional unemployment? (a) Timothy is looking for a job where he can apply his expertise in computer programming. (b) Thomas recently quit his job to start his own business. (c) Tina was laid o temporarily while her company downsized. (d) Terrance is one of more than a dozen applicants for a position teaching high school math.

(a) Timothy is looking for a job where he can apply his expertise in computer programming.

A price ceiling is: (a) a maximum price permitted by law. (b) a minimum price at which sellers are willing and able to sell. (c) a minimum price permitted by law. (d) a maximum price at which buyers are willing and able to buy.

(a) a maximum price permitted by law.

How is unemployment rate calculated?

unemployment rate = number of unemployed persons / labor force.

Bribery, first-come, first-served schemes, and personal connections: (a) are means of allocating goods in a market with a price ceiling set below market equilibrium. (b) do not occur in markets where governments impose price ceilings, because of strict government regulation. (c) are means of selling goods at the market equilibrium price when the government imposes a price ceiling below market equilibrium. (d) never occur in U.S. markets.

(a) are means of allocating goods in a market with a price ceiling set below market equilibrium.

If the Fed sells $200 million in government bonds, the total money supply will: (a) decrease by more than $200 million. (b) decrease by less than $200 million but more than $0 million. (c) decrease by exactly $200 million. (d) not change.

(a) decrease by more than $200 million.

Which asset would you classify as being most liquid? (a) demand deposits (b) small-time deposits (c) gold bullion (d) a home

(a) demand deposits

Real GDP and nominal GDP are: (a) equal only in the base year. (b) always equal. (c) equal in all years except the base year. (d) never equal.

(a) equal only in the base year.

"According to the supply and demand model, all else equal, if the inputs used to produce a good become less costly, supply will increase, causing the price to rise, which causes the quantity demanded to fall." This statement is: (a) false, because the price will fall. (b) true. (c) false, because quantity supplied, not supply, will increase. (d) false, because the demand, not the quantity demanded, will fall.

(a) false, because the price will fall.

Why could very high rates of inflation cause velocity to increase? (a) The more people earn, the faster they spend it. (b) The more money loses its value, the faster people try to spend it. (c) The more people earn, the faster prices rise. (d) The more inflation there is, the more there is to buy.

(b) The more money loses its value, the faster people try to spend it.

Which of the following occurs in the long run? (a) Workers confuse real wages with nominal wages. (b) Unexpected inflation is absent. (c) Prices are sticky. (d) The SRAS curve intersects the AD curve at an output growth rate higher than the Solow growth rate.

(b) Unexpected inflation is absent.

A price floor: (a) encourages the most efficient allocation of resources. (b) can lead to wasteful increases in quality. (c) prevents lost gains from trade. (d) causes a shortage.

(b) can lead to wasteful increases in quality.

To increase the money supply in the economy, the Fed would: (a) carry out open market sales and/or raise the reserve ratio. (b) carry out open market purchases and/or lower the discount rate. (c) carry out open market sales. (d) increase the discount rate.

(b) carry out open market purchases and/or lower the discount rate.

Automatic stabilizers are: (a) a result of the United States' regressive tax system. (b) changes in fiscal policy that stimulate aggregate demand in a recession without the need for explicit action by policymakers. (c) not very effective fiscal policy. (d) subject to significant lags.

(b) changes in fiscal policy that stimulate aggregate demand in a recession without the need for explicit action by policymakers.

Which type of unemployment is likely to be higher when real GDP growth is lower? (a) natural unemployment (b) cyclical unemployment (c) structural unemployment (d) frictional unemployment

(b) cyclical unemployment

If the inflation rate falls from 4% in 2005 to 2% in 2006, then: (a) the average price level has declined. (b) disinflation has occurred. (c) the value of money has increased. (d) deflation has occurred.

(b) disinflation has occurred.

The intended effect of an expansionary monetary policy is that aggregate demand: (a) increases, raising real GDP growth only in the long run. (b) increases, raising real GDP growth in the short run, but only inflation rises in the long run. (c) increases, raising inflation and real GDP growth in both the short run and the long run. (d) remains unchanged while the economy's long-run potential growth rate increases.

(b) increases, raising real GDP growth in the short run, but only inflation rises in the long run.

Wages are sticky when: (a) they are set according to inflation expectations that end up being correct. (b) labor unions set wage contracts for a certain period of time. (c) prices are flexible. (d) prices are sticky.

(b) labor unions set wage contracts for a certain period of time.

An increase in inflation will cause the long-run aggregate supply curve to: (a) shift inward. (b) not shift at all. (c) shift outward. (d) shift randomly.

(b) not shift at all.

When workers lose their jobs and become officially unemployed, the number of people in the labor force: (a) becomes difficult to predict. (b) remains constant. (c) decreases. (d) increases.

(b) remains constant.

The enormous variety of goods and services that we consume each day can be attributed mainly to: (a) early craftsmen handing down their knowledge. (b) specialization and trade. (c) government regulations. (d) home production.

(b) specialization and trade.

Which refers to the decrease in private spending when government spending increases? (a) the multiplier effect (b) the crowding out effect (c) the automatic stabilizing effect (d) the timing effect

(b) the crowding out effect

The main difference between Medicare and Medicaid is that Medicare covers medical care of: (a) foreigners, while Medicaid covers medical care of only U.S. citizens. (b) the elderly, while Medicaid covers medical care of the poor and disabled. (c) the poor and disabled, while Medicaid covers medical care of the elderly. (d) full-time workers, while Medicaid covers medical care of part-time workers.

(b) the elderly, while Medicaid covers medical care of the poor and disabled.

The purpose of FICA taxes is to fund: (a) defense expenditures. (b) health services for elderly people. (c) Social Security payments. (d) presidential campaigns.

(c) Social Security payments.

What is the Fisher effect? (a) The tendency of nominal interest rates to fall with higher expected inflation rates. (b) The tendency of real interest rates to fall with higher expected inflation rates. (c) The tendency of nominal interest rates to rise with higher expected inflation rates. (d) The tendency of real interest rates to rise with higher expected inflation rates.

(c) The tendency of nominal interest rates to rise with higher expected inflation rates.

An increase in demand is: (a)a shift in the supply curve down and to the right. (b)a movement along a fixed demand curve caused by a rightward shift in the supply curve. (c) a shift in the demand curve up and to the right. (d) a movement along a fixed supply curve caused by a rightward shift in the demand curve.

(c) a shift in the demand curve up and to the right.

The aggregate demand curve shows the relationship between real GDP growth and the: (a) interest rate. (b) expected inflation rate. (c) actual inflation rate. (d) long-run inflation rate.

(c) actual inflation rate.

The market value of the output produced in the United States by a permanent U.S. resident is included in: (a) U.S. GDP only. (b) U.S. GNP only. (c) both U.S. GDP and U.S. GNP. (d) neither U.S. GDP nor U.S. GNP.

(c) both U.S. GDP and U.S. GNP.

If the equilibrium wage is $9 in the market for hotel workers and $8 in the market for restaurant workers and both markets have similar elasticities of labor supply and demand, then a minimum wage of $10 in both markets will: (a) cause more unemployment among hotel workers than restaurant workers. (b) have no effect in either market. (c) cause more unemployment among restaurant workers than hotel workers. (d) cause the same amount of unemployment in both markets.

(c) cause more unemployment among restaurant workers than hotel workers.

When the government monetizes its debt, the results are: (a) higher inflation and benefits for holders of government bonds. (b) lower inflation and benefits for holders of government bonds. (c) higher inflation and losses for holders of government bonds. (d) lower inflation and losses for holders of government bonds.

(c) higher inflation and losses for holders of government bonds.

The discount rate is the: (a) interest rate on short-term Treasury securities. (b) ratio of reserves to deposits. (c) interest rate banks pay when they borrow directly from the Fed. (d) overnight lending rate on loans from one major bank to another.

(c) interest rate banks pay when they borrow directly from the Fed.

The time it takes Congress to propose and pass a plan for fiscal policy is called the: (a) adjustment lag. (b) recognition lag. (c) legislative lag. (d) effectiveness lag.

(c) legislative lag.

What do lower production costs result in? (a) no change in equilibrium price (b) lower equilibrium quantity (c) lower equilibrium price (d) higher equilibrium price

(c) lower equilibrium price

Nominal GDP is defined as GDP: (a) measured by using the quantity of products produced. (b) measured at prices that occurred during the base year. (c) measured at prices that prevailed during the year GDP was measured. (d) divided by the population.

(c) measured at prices that prevailed during the year GDP was measured.

The annual difference between federal spending and revenues is called the: (a) debt-to-GDP ratio. (b) national debt. (c) national defcit. (d) debt held by the public.

(c) national deficit.

The Federal Funds rate is the: (a) ratio of reserves to deposits. (b) interest rate on short-term Treasury securities. (c) overnight lending rate on loans from one major bank to another. (d) interest rate banks pay when they borrow directly from the Fed.

(c) overnight lending rate on loans from one major bank to another.

Trade creates value because: (a) raw materials are transformed into finished products. (b) people get what they want. (c) people exchange things they do not want for things they do. (d) idle resources are put to use.

(c) people exchange things they do not want for things they do.

In the long run, the quantity theory of money says that the growth rate of the money supply will be approximately equal to the: (a) growth rate of real GDP. (b) velocity of money. (c) price level. (d) inflation rate.

(c) price level.

Using a graph of the AD and long-run aggregate supply curves, the Internet revolution of the 1990's caused: (a) real growth to be unchanged and inflation to increase. (b) real growth to be unchanged and inflation to decrease. (c) real growth to increase and inflation to decrease. (d) real growth to decrease and inflation to increase.

(c) real growth to increase and inflation to decrease.

An increase in government spending growth will cause the LRAS curve to: (a) shift outward. (b) shift inward. (c) remain unchanged. (d) first shift outward and then shift inward.

(c) remain unchanged.

Tyler owes $100,000, but he owns Mexican Amati paintings that he could sell immediately for $80,000 or within a few months for $120,000. If these are all the assets and liabilities that Tyler has, Tyler is: (a) insolvent and illiquid. (b) insolvent but liquid. (c) solvent but illiquid. (d) solvent and liquid.

(c) solvent but illiquid.

Over the past few decades, the U.S. economy has switched from a primarily manufacturing economy to a service economy. Many individuals working in manufacturing positions lost their jobs, and many new jobs opened up in services. For those who lost jobs in manufacturing, this is an example of: (a) cyclical unemployment. (b) industry unemployment. (c) structural unemployment. (d) frictional unemployment.

(c) structural unemployment.

An increase in government spending causes: (a) a downward movement along the aggregate demand curve. (b) the aggregate demand curve to shift to the left. (c) the aggregate demand curve to shift to the right. (d) an upward movement along the aggregate demand curve.

(c) the aggregate demand curve to shift to the right.

The largest source of revenue for the U.S. federal government is: (a) excise taxes, such as taxes on gasoline and alcohol. (b) the corporate income tax. (c) the individual income tax. (d) Social Security and Medicare taxes.

(c) the individual income tax.

A surplus occurs when: (a) the quantity demanded is equal to the quantity supplied. (b) the quantity demanded is the opposite of the quantity supplied. (c) the quantity supplied is greater than the quantity demanded. (d) the quantity demanded is greater than the quantity supplied.

(c) the quantity supplied is greater than the quantity demanded.

Vernon Smith began his laboratory experiments expecting: (a) to win a Nobel Prize. (b) exactly the results that he got. (c) to prove that the supply and demand model was wrong. (d) price, quantity, and gains from trade to converge even more quickly to equilibrium.

(c) to prove that the supply and demand model was wrong.

When the Fed buys bonds, it increases the demand for bonds, which pushes: (a) down the price of bonds, thus raising the interest rate. (b) up the price of bonds, thus raising the interest rate. (c) up the price of bonds, thus lowering the interest rate. (d) down the price of bonds, thus lowering the interest rate.

(c) up the price of bonds, thus lowering the interest rate.

Nigeria receives $53 of producer surplus from each barrel of oil sold at $60. At that level of production, Nigeria's cost to produce a barrel of oil is: (a) $53. (b) $1.13. (c) $113. (d) $7.

(d) $7.

Which statement about a free market maximizing the gains from trade is false? (a) Between buyers and sellers, there are neither unexploited gains from trade nor wasted resources. (b) The supply of goods is sold by the sellers with the lowest costs. (c) The supply of goods is bought by the buyers with the highest willingness to pay. (d) All of the buyers and sellers in the market fully intended to maximize total gains from trade.

(d) All of the buyers and sellers in the market fully intended to maximize total gains from trade.

_____________ refers to the Federal Reserve's purchase of longer-term government bonds or other securities. (a) An open market purchase (b) Quantitative tightening (c) An open market sale (d) Quantitative easing

(d) Quantitative easing

The U.S. Social Security tax (FICA) is an example of a: (a) Flat tax. (b) Proportional tax. (c) Progressive tax. (d) Regressive tax.

(d) Regressive tax.

Suppose a country without any international trade opens its borders to international trade. After specialization how will its location on its production possibility frontier change? (a) The country moves along the PPF toward its comparative advantage. (b) The country moves along the PPF away from its comparative advantage. (c) The country moves from inside the PPF to on the PPF. (d) The country moves from on the PPF to beyond the PPF.

(d) The country moves from on the PPF to beyond the PPF.

A real shock causes: (a) a shift of the aggregate demand curve. (b) a movement along the long-run aggregate supply curve. (c) a shift of both the long-run aggregate supply curve and the aggregate demand curve. (d) a shift of the long-run aggregate supply curve.

(d) a shift of the long-run aggregate supply curve.

Which is not included in the U.S. money supplies M1 and M2? (a) checkable deposits (b) currency in circulation (c) savings deposits (d) bond mutual funds

(d) bond mutual funds.

Demand slopes down because: (a) goods usually only have a single use. (b) supply slopes up, and supply and demand must intersect. (c) consumers focus too much on the price of goods when they choose the quantity to demand. (d) consumers will choose to use goods only in their most valuable uses when prices are high.

(d) consumers will choose to use goods only in their most valuable uses when prices are high.

Raising the minimum wage will: (a) decrease the amount of poverty. (b) increase the productivity of workers. (c) cause widespread panic. (d) decrease employment among low-skill workers.

(d) decrease employment among low-skill workers.

Ellen is a buyer in Vernon Smith's classroom experiment of the market model. Which does she know? (a) all buyers' willingness to buy (b) the market equilibrium quantity (c) every seller's willingness to sell (d) her own willingness to buy

(d) her own willingness to buy

As trade becomes more widespread, specialization ______, which in turn ______ productivity. (a) increases; decreases (b) decreases; decreases (c) decreases; increases (d) increases; increases

(d) increases; increases

Who actually bears the burden of the FICA tax? (a) employees and employers in equal amounts (b) mostly employers (c) Congress (d) mostly employees

(d) mostly employees

Debt held outside the U.S. government is called the: (a) debt-to-GDP ratio. (b) debt to foreign investor holdings. (c) total U.S. national debt. (d) national debt held by the public.

(d) national debt held by the public.

Nominal wage confusion occurs when: (a) workers respond to their real wage instead of to their nominal wage. (b) real wage is much greater than the nominal wage. (c) workers respond to their nominal wage instead of to their real wage. (d) nominal wage is much greater than the real wage.

(d) nominal wage is much greater than the real wage.

Menu costs are the costs associated with changing: (a) expected inflation. (b) jobs. (c) wages. (d) prices.

(d) prices.

Which is NOT a function of the Federal Reserve? (a) regulating the U.S. money supply (b) regulating the U.S. financial system (c) serving as the lender of last resort (d) providing loans to small businesses

(d) providing loans to small businesses.

The expression (2011 prices ÷ 2010 prices) × 100 is equal to: (a) the real growth rate between 2010 and 2011. (b) real GDP in 2011 if 2010 is the base year. (c) real GDP in 2010 if 2011 is the base year. (d) the GDP deflator between 2010 and 2011.

(d) the GDP deflator between 2010 and 2011.

When the Civil Aeronautics Board (CAB) kept airline ticket prices above the market price on interstate flights: (a) in-state flights, which were not regulated by the CAB, also raised prices. (b) airlines were not able to compete with each other for customers. (c) customer service was notably worse than after the price floors were eliminated. (d) there was a wasteful increase in flight quality.

(d) there was a wasteful increase in flight quality.

Which of the following choices contains only factors that cause the supply curve to shift to the right? (a) a rise in technology, a fall in the costs of production, a fall in taxes on output (b) a decrease in taxes on production, a fall in subsidies on production, a rise in costs of production (c) a fall in production costs, a rise in technology, an increase in taxes on output (d) a fall in tastes and preferences for the product, economic growth, and a rise in technology

(a) a rise in technology, a fall in the costs of production, a fall in taxes on output

The ability of one producer to produce one good or service using fewer inputs than another producer is: (a) absolute advantage. (b) comparative advantage. (c) opportunity cost. (d) competition.

(a) absolute advantage.

Which of the following is NOT the result of a price ceiling? (a) additional gains from trade (b) time costs (c) misallocation of resources (d) shortages

(a) additional gains from trade

The market value of all final goods and services produced by a country's permanent residents, wherever located, in a year is known as: (a) GNP. (b) CPI. (c) GDP. (d) BEA.

(a) GNP.

If the market equilibrium price for two-bedroom apartments is $750 and the city government sets a price ceiling at $600: (a) landlords' revenues will fall and fewer families will live in apartments. (b) families will benefit, as more of them are able to rent an apartment, and landlords' revenues will remain the same, as the lower prices will be counteracted by higher occupancy. (c) landlords will receive higher revenues, as more families live in apartments. (d) landlords will lose revenue, even though more families will move into apartments.

(a) landlords' revenues will fall and fewer families will live in apartments.

In the absence of any policy intervention, when C falls the result will be: (a) lower inflation and real growth. (b) higher inflation and real growth. (c) higher inflation and lower real growth. (d) lower inflation and higher real growth.

(a) lower inflation and real growth.

Rent controls: (a) misallocate resources. (b) improve rental quality. (c) decrease the costs of search. (d) create surpluses.

(a) misallocate resources.

What is a price ceiling on rental housing called? (a) rent control (b) floor control (c) price floor (d) ceiling control

(a) rent control

Price controls: (a) result in many goods being allocated through bribery and personal connections. (b) are usually the best way to help the poor. (c) encourage sellers to improve the quality of their goods. (d) ensure that goods will be allocated efficiently through publicly announced prices.

(a) result in many goods being allocated through bribery and personal connections.

Sticky wages and prices are incorporated in the AD-AS model by the: (a) short-run aggregate supply curve. (b) aggregate demand curve. (c) long-run aggregate supply curve. (d) both the aggregate demand and short-run aggregate supply curves.

(a) short-run aggregate supply curve.

In a non-recession year, the majority of U.S. unemployment is: (a) structural. (b) recurrent. (c) cyclical. (d) frictional.

(a) structural.

When a product is sold for $15, buyers demand 24 units, but sellers are willing to supply 51 units. This leads to a(n): (a) surplus of 27 units. (b) shortage of 27 units. (c) equilibrium at 75 units. (d) equilibrium at 24 units.

(a) surplus of 27 units.

Which of the following is NOT a result of a price ceiling? (a) surpluses (b) lost gains from trade (c) misallocation of resources (d) reductions in product quality

(a) surpluses

The marginal tax rate is the: (a) tax rate paid on each additional dollar earned. (b) average tax rate paid on all earned income. (c) minimum tax rate paid on income in the United States. (d) tax rate paid on capital gains.

(a) tax rate paid on each additional dollar earned.

Systemic risk is present when: (a) the failure of one financial institution will bring down other institutions as well. (b) a bank or other financial institution acts recklessly, hoping that the Fed and regulators will later bail them out. (c) the U.S. government defaults on Treasury securities. (d) the Fed increases the money supply when it should decrease it.

(a) the failure of one financial institution will bring down other institutions as well.

Which of the following does NOT contribute directly to the persistence of structural unemployment? (a) work tests (b) unemployment benets (c) employment protection laws (d) unions

(a) work tests

If inflation > Expected inflation, (a) firms' profits will decrease. (b) firms' profits will increase. (c) there will be no change in real GDP growth because it is determined by real factors. (d) money growth will cause the short-run aggregate supply curve to shift.

(b) firms' profits will increase.

If the Fed credits Alex's checking account with $8,000 and Alex's bank decides to keep the entire $8,000 in the form of reserves instead of lending it out, how much does the money supply increase? (a) $64,000 (b) $8,000 (c) $0 (d) $1,000

(b) $8,000

A country has two income tax brackets: people pay 10% on their first $50,000 and 20% on everything they earn over $50,000. If someone earns $75,000, what is that person's marginal tax rate? (a) 15% (b) 20% (c) 13.3% (d) 10%

(b) 20%

Jordan loaned Taylor $1,200 on March 15, 2009. Taylor returned $1,260 on March 14, 2010. Inflation was 2% over the 1-year period. What is the real interest rate that Taylor paid? (a) 2% (b) 3% (c) 5% (d) 7%

(b) 3% ($1,200*.02=24 ---> 1,260-24=1,236 ---> 1,236-1,200=36 ---> 36/1,200=.03 or 3%)

Monetary policy by the Fed is estimated to take __________ to have an impact on the economy. (a) 0 to 3 months (b) 6 to 18 months (c) 3 to 6 months (d) 18 to 36 months

(b) 6 to 18 months

Which statement MOST accurately describes GDP? (a) GDP is the sum of the market value of all goods and services purchased within a country in a given year. (b) GDP is the sum of the market value of all final goods and services produced within a country in a given year. (c) GDP is the sum of the market value of all intermediate goods and services produced within a country in a given year. (d) GDP is the sum of the market value of all final goods and services consumed within a country in a given year.

(b) GDP is the sum of the market value of all final goods and services produced within a country in a given year.

Which of the following describes a way in which housing vouchers are superior to rent controls for providing affordable housing to the poor? (a) Housing vouchers cause excess supply rather than excess demand. (b) Housing vouchers increase the amount of available housing rather than decrease it. (c) Housing vouchers subsidize millionaires as well, rather than just helping the poor. (d) Housing vouchers make it easier, rather than harder, for the poor to afford housing.

(b) Housing vouchers increase the amount of available housing rather than decrease it.

Which of the following best describes the principle of comparative advantage? (a) Some people can produce the same good better than other producers can. (b) Someone has the ability to produce the same good for the lowest opportunity cost. (c) To produce more of one good, people have to produce less of another good. (d) Someone has the ability to produce the same good using fewer inputs than another producer.

(b) Someone has the ability to produce the same good for the lowest opportunity cost.

How is labor force participation rate calculated?

labor force participation rate = labor force / adult population.